SSS 2010 Annual Report

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  • 1. SOCIAL SECURITY SYSTEM 2010 annual report KabaliKat sa tuwid na landassa Pagbangon ng Pilipinas
  • 2. Highlights of Operations (Amounts in Million Pesos) Consolidated For the Year Increase/(Decrease) 2010 2009 Amount % A. REVENUES & EXPENDITURES Revenues 107,120.75 95,336.51 11,784.24 12.4 Contributions 79,272.86 72,350.89 6,921.97 9.6 Investment and Other Income, net 27,847.89 22,985.62 4,862.28 21.2 Expenditures 84,288.57 79,124.55 5,164.02 6.5 Benefit Payments 77,174.16 72,049.96 5,124.20 7.1 Operating Expenses 7,114.41 7,074.59 39.82 0.6 Net Revenue/(Loss) 22,832.19 16,211.96 6,620.22 40.8 B. ASSETS & RESERVES Assets 297,591.34 272,610.65 24,980.69 9.2 Investments 273,265.61 248,641.45 24,624.16 9.9 SSS Properties 3,318.75 3,413.69 (94.94) (2.8) Others 21,006.98 20,555.52 451.47 2.2 Liabilities 8,496.31 7,280.83 1,215.47 16.7 Reserves 289,095.03 265,329.82 23,765.22 9.0 Social Security System For the Year Increase/(Decrease) 2010 2009 Amount % A. REVENUES & EXPENDITURES Revenues 104,973.40 93,155.25 11,818.15 12.7 Contributions 77,956.99 71,166.95 6,790.04 9.5Contents Investment and Other Income, net Expenditures 27,016.41 83,102.24 21,988.30 77,931.69 5,028.10 5,170.55 22.9 6.601 Highlights of Operations Special Articles 28 Statement of Financial Position Benefit Payments 76,088.14 70,963.92 5,124.22 7.202 Statement of Mission and Vision 16 Implementation of the Condonation Law 29 Statement of Comprehensive Income Operating Expenses 7,014.10 6,967.77 46.33 0.7 on Penalty on Contributions 30 Statement of Changes in Reserves 17 The UMID: Its Mandate 31 Statement of Cash Flows Net Revenue/(Loss) 21,871.16 15,223.56 6,647.60 43.7Messages03 Message of the President of the Republic 19 2010 SSS Family Day 32 Notes to Financial Statements 20 2010 Staffing and other Human Resource 45 Internal Auditor’s Report B. ASSETS & RESERVES of the Philippines04 Message of the SSC Chairman Management Directions 46 Historical Data Assets 271,267.54 247,891.34 23,376.20 9.406 Message of the SSS President and CEO 21 The SSS Museum and SSS Library Investments 252,630.57 228,919.53 23,711.04 10.4 22 SSS In 2011 and Beyond: Heeding the Management SSS Properties 3,318.75 3,413.69 (94.94) (2.8)2010 in Review Call for Transformational Change 48 Photo of the Social Security Commission Others 15,318.21 15,558.12 (239.91) (1.5)10 Changing of the Guards 50 Photos of the SSS Senior Management Liabilities 8,604.29 7,389.38 1,214.91 16.4 Financial 55 SSC and SSS Management Directory Reserves 262,663.25 240,501.96 22,161.29 9.211 Expressing Corporate Social Responsibility12 Forging Partnership for Better Service 26 Statement of Management’s Responsibility 57 Photo of Annual Report Committee and13 Nurturing Relationships with Stakeholders for the Financial Statements Secretariat Employees’ Compensation and State Insurance Fund14 Developing SSS Employees 27 State Auditor’s Report on the15 Celebrating SSS’ 53 years Financial Statements For the Year Increase/(Decrease) 2010 2009 Amount % A. REVENUES & EXPENDITURES Revenues 2,147.35 2,181.26 (33.90) (1.6) Contributions 1,315.87 1,183.94 131.92 11.1 Investment and Other Income, net 831.49 997.31 (165.83) (16.6) SOCIAL SECURITY SYSTEM 2 0 1 0 a n n u a l r e p o r t About the Cover Expenditures 1,186.33 1,192.86 (6.53) (0.5) Benefit Payments 1,086.02 1,086.03 (0.02) (0.0) KabaliKat sa tuwid na landas sa Pagbangon ng Pilipinas Kabalikat sa Tuwid na Landas sa Pagbangon ng Pilipinas Operating Expenses 100.31 106.83 (6.51) (6.1) For 53 years, the Filipino has in the Social Security System of the Philippines or the SSS an ally, a partner and a friend. Net Revenue/(Loss) 961.02 988.40 (27.37) (2.8) Through its valuable aid and assistance programs, the institution has become a key player in the government’s program of nation building. B. ASSETS & RESERVES Our cover features an SSS member and his family, the recipient of SSS benefits, programs and services. He is a symbol Assets 26,431.84 24,827.91 1,603.93 6.5 Investments 20,635.03 19,721.92 913.12 4.6 of the care and protection that SSS aims to provide its network of members nationwide. A bright tomorrow for the SSS Others 5,796.81 5,106.00 690.81 13.5 member is promised as depicted by a backdrop of a modern, progressive cityscape; a long straight road symbolizes Liabilities 0.06 0.05 0.01 11.8 the nurturing support of SSS which is in line with the new administration’s “Tuwid na Landas”. Reserves 26,431.79 24,827.86 1,603.92 6.5
  • 3. Message Statement of Mission of the President of the Republic of the Philippines The mission of the SSS is spelled out in Section 2 of the Social Security Law (Republic Act No. 1161), as amended by the Social Security Act of 1997 (Republic Act No. 8282): “It is the policy of the State to establish, develop, promote and perfect a sound and viable tax- My warmest greetings to the Social Security System on the exempt social security system suitable to the needs of the people throughout the Philippines, publication of your 2010 Annual Report. which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death and other I commend the SSS in your more than 50 years as a key contingencies resulting in loss of income or financial burden. Towards this end, the State shall partner of government, fulfilling our collective mission to endeavor to extend social security protection to workers and their beneficiaries.” improve the lives of our people. Through the protection that you provide your members and your programs supporting their respective enterprises, your institution has proved crucial not only to the public welfare but also to our Statement of Vision common goal of revitalizing the economy. It is my fervent hope that you will carry on in your thrust to empowering The SSS aims to develop and promote a viable, universal and equitable social protection our citizenry and making them vital participants, as we set scheme through world-class service. out to rebuild our country in this daylight of hope. VIABLE means that it is financially sustainable, non-distortionary, and requires no government We have the momentum to sustain this movement for subsidy. Current and future generations of workers and retirees are also assured of meaningful national transformation, to report our government and benefits in return for their contributions. society and to restore our country’s place in the community of nations. Let us stay united as one people in realizing our UNIVERSAL means that protection shall be provided to all residents of the Philippines, citizens dream of a stable, progressive Philippines. and non-citizens alike, regardless of race, creed, gender, age, geographic location and socio- economic status. Attention will be given specially the disadvantaged and overseas Filipino workers (OFWs). EQUITABLE means fair and uniform coverage shall be made available to all. Benefit entitlements shall be closely linked with contributions. TUWID NA LANDAS AGENDA: WORLD-CLASS SERVICE means that the highest standards of service shall be used to ensure BENIGNO S. AQUINO III 1. Transform the organization and total member satisfaction. A multi-skilled, forward-looking and generalist SSS workforce shall its employees; provide service that is prompt, accurate and courteous. 2. Simplify/Innovate to reduce corruption and improve efficiency; and, 3. Optimize resources.2 2010 AN N UAL REPORT 3
  • 4. RESPONDING TO A SUBLIME ADVOCACy Message of the Chairman T he year 2010 was a promising one. We witnessed a dedicated officers and employees who had toiled throughout A commitment to strike a balance between our corporate I am confident that we can sustain this positive growth as we turning point in our national history that heeded the call the decades for the benefit of its current members and their goals and institutional responsibilities is magnified through all work together towards a bigger, better and more professional for genuine change in society filled with hope. beneficiaries and future generations. the policies that the present Commission formulates and SSS for our members. passes. More than just strengthening the fund’s financial The Social Security System is an ideal template for one to Also in 2010, the Social Security Commission laid down policies condition through optimum compliance, realizing investment On behalf of my fellow Commissioners, I thank the Management renew his enthusiasm and entrepreneurial spirit. A government to put in effect the laws passed by Congress, R.A. No. 9903 earnings thru prudent investment mechanisms of the SSS and and all the hardworking officers and employees for their financial institution immersed with the working man’s vision of or the Social Security Condonation Law of 2009 and R.A. No. advancing economic and social development, the Commission remarkable work and steadfast commitment to the SSS. perpetual social protection. The SSS is energetic, professional 9507 or the Socialized and Low-Cost Housing Restructuring is determined to adhere to the principle of promoting social and has achieved and still much capable of attaining greater and Condonation Program. These two laws were designed to justice in the country. heights that can make a real difference in our country. encourage employers and member-borrowers to update their records with SSS, while benefitting from the condonation of The SSS workforce expresses its support and adherence to the So it was with great honor that I accepted the challenge, after accumulated penalties and loan restructuring schemes. Quality Policy of the SSS, in line with the mandate of the Citizen’s spending nearly four decades of my professional life using Charter where a commitment to provide prompt, convenient, whatever management and leadership skills I honed in the The implementation of the Member Loan Penalty Condonation reliable and meaningful social protection services to our current private sector while steering the course of the biggest food Program for Employers restored employees’ access to benefits and future members and their beneficiaries is emphasized. We company in the country. and privileges that SSS provides for its members while allowing also commit to follow international standards and the Anti- member-employers to update and remain compliant. Red Tape Act in rendering service to our constituents through The historic change in national leadership in 2010, together continuing improvements of our work processes founded on JUAN B. SANTOS with laudable performance of the SSS allowed the net revenue Further initiatives are likewise underway to encourage non- good governance, public accountability and transparency. of the fund to soar from Php16.21 Billion in 2009 to Php22.83 paying members to return to the fold through intensive coverage Billion in 2010. drives directed at local government units, government agency The SSC will continue to initiate policy reforms to remove partners and special sectors all over the country. The OFW needless obstacles that are counter-productive to the concept of The new Commissioners of the Social Security Commission, Caravan will also send several hard-working commissioners, universal coverage. The board committees composed of Audit, together with the highly-capable President and Chief Executive together with SSS officials and staff, to conduct drives in key Investment Oversight, OFW Coverage, Information Technology, Officer look forward to further improve the health of the fund, countries with high concentrations of overseas Filipino workers and Coverage and Collection strengthens communication lines inspired by the commitment and efforts of its competent and to bring in other coverable employed members to the fold. with management and amplify the thrust of this Commission as an enabler of worthy plans and programs.4 2010 AN N UAL REPORT 5
  • 5. REDEFINING THE DYNAMICS OF SOCIAL SECURITY Message of the President and CEO Magic Key that Opens Countless Doors of functions in some areas of the organization and through I would like SSS to be always ready to attend to our members in I made the whole workforce cognizant of the fact that the the use of the latest computer technology. We also enhanced times like these – making sure that benefits and privileges are road towards these may be a long and arduous one. The SSS In 2010, when I accepted the position as President and CEO of our benefits and privileges to our members through growth in not only adequate to the basic minimum level but also given employees felt the heavy load, too. yet we agreed that we will the SSS, I knew what I was getting into. I knew that if there is our earnings and resources. And we moved to create a more expeditiously and without unnecessary effort on the part of the not hesitate to take that road, for the reward of an enduring SSS any place where one’s mettle for service is truly tested, it is in humane and responsive social security for all generations to claimant. I would like SSS employees to be in the position to is well worth it. government service where the challenges are often multifold come for all Filipinos in all parts of the world. assure all our valued members that we will walk with them and where time and resources are always not enough to get through economically trying times, that we will assist them in Contribution Collections the job done. I knew that leading a public institution that is as SSS as Bastion of Civic Responsibility every way we can so that they can fully avail themselves of challenging and as complex as the SSS with over 28 million the benefits and privileges due them. I would like the whole In 2010, collection of contributions continued to rise to a record- membership is not going to be easy. I knew that I have to chart Workers all over the country have different stories to tell, yet SSS workforce to make our members feel that SSS is their high of over 79 billion pesos as compared with over 72 billion a roadmap that will serve as our guidepost in refreshing the their stories share a common theme. This is – that every hard- stronghold, their bastion of hope, theirs and their loved ones’ pesos in 2009. This was realized through the implementation of institution, reinvigorating its sense of mission and reaffirming earned peso is needed in the present time. Essentials such as security for a better future. RA 9903 or the Social Security Condonation Law of 2009 and its mandate of social protection. food, shelter, clothing, and, if possible, education, cannot be RA 9507 or the Socialized and Low-cost Housing Restructuring put off for tomorrow. Worst, more often than not, there is seldom Despite the immensity in breadth and scope of the work, 2010 and Condonation Program. Efforts of collecting delinquent My resolve to serve was bolstered by a magic key that helped enough money left over to prepare for the unpredictable, but saw our commitment to pursue our mandate with dedication member contributions and loan amortizations were intensified me to steer SSS to the direction where it should go. This was imminent future. and zeal. We were ever forward-looking and started putting in and the installment payment scheme and dacion-en-pago President Benigno S. Aquino III’s “matuwid na daan” which place social protection strategies specifically in the following guidelines for delinquent employers were revised to liberalize opened a lot of challenges and opportunities that signaled that But the future will come. That is the harsh reality of life and it requisite action areas: social security coverage expansion; more installment terms. This strategy brought in over a billion pesos 2010 was the propitious time to intensify work in the SSS and will not always be rosy and bright when it arrives. Breadwinners meaningful benefits; investments optimization; continuous that exceeded the target of 900 million pesos. to regain its focus. may fall ill, debilitating accidents may occur, and the youthful improvement of our work processes following international intensity and vigor with which we work today will someday standards in service delivery to qualify for ISO certification This increase in contribution collection was also attributed So while I recognize what my predecessor did, that is, bringing give way to old age. from international certifying body; adherence to the SSS through the expansion of the coverage of the public transport SSS to its prime position in the field of social security which was Quality Policy in line with the mandate of the Citizen’s Charter; sector and the seafarers when a partnership between the Land indeed no mean feat, we started work. We moved to fortify SSS In the midst of all these, social security fund is probably the organization re-engineering; and, charter amendments pursuit, Transportation Franchising Regulatory Board (LTFRB) and the financial standing by enhancing our financial viability through least expensive yet most feature-rich insurance package a among others. Philippine Overseas Employment Administration (POEA) was reinforced investment portfolios. We improved our operations worker will ever find and can rely on to tide him over until forged. Another source was the completion of the agreement through enhancing our service capabilities through delineation times become normal.6 2010 AN N UAL REPORT 7
  • 6. MEssAgE Of ThE PREsidENT ANd CEO between SSS and Portugal that provided voluntary social As countries in the world achieve higher levels of economic security coverage to Filipinos residing in that country. The development, their social security systems also advance in marked increase in contribution collection was complemented parallel, extending the scope, level and quality of benefits and by expanding the network of e-payment facilities that ensures services provided. SSS lives with this principle as it started steady inflow of collection. implementing RA 9485 or the Anti-Red Tape Act (ARTA) where the step-by-step processes of its operations as well as the ideal Benefit Payments processing time are laid out. It also provided a yardstick within which to measure the performance of our frontline services. SSS paid over 77 billion pesos worth of benefits to its members reflecting a seven per cent increase in 2010 from the previous In line with this was the beginning of the efforts to inculcate 72 billion pesos released in 2009. The bulk of the releases in the consciousness of every SSS employee the essence went to retirement and death claims which accounted for of the Quality Policy and the significance of the continual nearly 85 per cent of total disbursements for the year. Parallel improvement of the work processes and orienting them in to this, measures to strengthen control in benefit payments installing the Quality Management System (QMS) in our were undertaken to ensure that the right benefits were afforded operations as a requirement towards ISO certification by an to the right beneficiaries at the right time. These measures international certifying body. were through the following programs: Enhanced Annual Confirmation of Pensioners; Revisions in the New Disability Our effort in upgrading our Information and Communication Program; Expansion of Sickness, Maternity and Employees Technology (ICT) system was notably a huge success. Twelve Compensation (SMEC) payments through the banks; conduct of its application systems from BSS to M9000 servers have already been migrated and completed. The new server allows disciplined. And they are not so much those who are brilliant as most important thing is to be unified by a common purpose, of meetings with the banks for the Electronic Data Interchange the enhancement of online capabilities while ensuring data much as those who are balanced. We have a huge membership a common commitment. Challenges are enormous. Speed is (EDI); Database Clean-up as a result of erroneous contingency integrity through stricter server security. Microfilming of our to serve so we have to have a workforce who looks at service as critical, therefore, focus is key. date, mismatched records in claims information, employee members’ records has also been started to enhance functionality not merely a task but a calling, a privilege and an honor. static and pension database. and accessibility. As SSS enters 2011, it braces itself to face more challenges even 2010 was the year when efforts to reinvigorate the human while we thank our valued members and their beneficiaries, Surge in Investments Income SSS has deployed and installed 290 ID card readers in resource machinery happened. This was through the our pensioners, our partner banks and other business partners, different branches to facilitate faster transactions and eliminate implementation of the Staffing Plan by promoting and absorbing the SSS personnel, the Social Security Commission, and His SSS optimized its investments and managed to post a moderate fraudulent claims. These card readers are compliant with deserving employees as well as upgrading and reclassifying Excellency President Benigno S. Aquino III for their unrelenting of over 27 billion pesos worth of investment income which the specifications of the Unified Multi-Purpose ID (UMID) executive positions. It was also in this year that various training support, trust, confidence and inspiration. was 34 per cent higher than the targeted 20 billion pesos for system. SSS, as member of the core group, has participated in programs were implemented to enhance the technical skills of 2010. Bulk of the income was contributed by SSS investments various technical working meetings and seminars to ascertain the whole workforce. We commit to continue to rejuvenate the SSS by infusing in government securities and equities that amounted to over the smooth transition of the SS ID to the UMID system. The innovative and productive strategies that would secure the 22 billion or 82 per cent of the total investment income. The UMID, which aims to streamline, harmonize, and unify existing The new Performance Evaluation System (PES) was also health of our funds while we make our operations respond SSS has also begun efforts to implement a trading system for ID systems in the government, has been envisioned as the designed in order to enhance institutional productivity. This to the call of the government towards transformation. We are equities and other tradable investments. It has also started government’s springboard in infusing the benefits of ICT to was followed by the development of a PES customized for the confident we shall be able to build a groundswell of support for exploring prospective foreign investments for diversification. improve public service. executives. our efforts, for we look at this as a rewarding endeavor. SSS has also engaged in developing programs that aimed to I and the rest of the SSS workforce have been made aware that On a lighter side, we encouraged our employees to indulge I exhort everyone in SSS to feel a winner – never giving up. improve the management of member loans. We have started we have much to be grateful for, and that we still have much in various athletic, cultural and arts appreciation activities to A wise man says: “The one who finishes the race is not the closing our Direct Housing Loan Program while establishing to strive for. renew camaraderie, foster teamwork and develop unifying strongest of all but the one who never gave up.” the guidelines for the implementation of the Member Loan spirit and just have fun. Penalty Condonation Program for Employers. The full-scale implementation of RA 9507 or the Socialized and Low-cost Nurturing Competence and Professionalism in Housing Loan Restructuring and Condonation Act has likewise the Organization Exhortation greatly improved SSS’ liquidity. It is notable, however, that the ratio of the social benefits through increased ownership and The transformations that are unfolding in the country serve as a The greatness of a nation does not only depend on the liberalizing access to home loans far outweighs financial profits. constant reminder of the need to keep the skills and competence advancement of its technologies, the expanse of its conquests of our employees abreast with the evolving social security or the wealth inside its coffer. The greatness of a nation lies in needs of our constituents. Based on what we have experienced, the moral fiber of its number one resource – its people. In the Improved Service Delivery vis-a-vis Lean EMILIO S. DE QUIROS, JR. progress happens by fits and starts, zigzagging upward with same breath, I would like to exhort everyone in the SSS that Spending many reverses. This is why in a complex organization such as we be guided by this adage. While we work hard to improve the SSS, we need effective, balanced people who know how to the management of our assets, enhance fiscal standing and In line with the government’s campaign for enhanced public adapt to this dynamics. In the corporate world, highly successful efficiency in our work processes, post remarkable growths in service and observance of judicious spending measures, SSS people are not so much those who are experienced in terms of all areas of operations, adapt to the ambivalent socio-economic showed a lower actual operating expenditure recorded at 7.11 years of tenure as much as those who are effective. They are not landscape of the country, or even earn the status of being the billion pesos compared with the projected figure of 8.65 billion so much those who are determined as much as those who are economic backbone in the field of social security, still the for 2010.8 2010 AN N UAL REPORT 9
  • 7. 2010 iN REViEW PROPELLING NATIONAL GROWTH THROUGH EFFICIENT SERVICES Expressing Corporate Social Responsibility Corporate Social Responsibility is not just a passing trend or once-a-year event in SSS; it is a serious and continuing commitment by both the management and workforce to exercise good corporate citizenship by helping the lesser privileged through community work and public service. For the SSS employees, their passion for volunteer work found fruition in the SSS Kabalikat ng Bayan Volunteer Corps, which conducted humanitarian missions in various cities throughout the year, some of which were sponsored by SSS as an institution. Changing of the Guards The year 2010 was marked by a change of government leadership of the country, after the May 2010 elections. With President Benigno S. Aquino III at the helm, the entire nation rallied support for his call for reforms and to follow “ang matuwid na landas” (the straight road). A change of leadership of the SSS also ensued in 2010, with veteran banker and insurance executive Emilio S. de Quiros, Jr. appointed as SSS President and Chief Executive Officer by President Aquino. The head may have changed, but the mandate of SSS remains the same: provide meaningful protection to members and their families against the hazards of life.10 2010 AN N UAL REPORT 11
  • 8. 2010 iN REViEW Nurturing Relationships with Stakeholders Employers, individual members (whether based inside or outside the country), and pensioners: these are among the Forging Partnerships for Better Service important stakeholders that SSS must always keep in mind as it continues to improve its programs, enhance its services, extend The SSS cannot perform its mandate of service alone. Despite its coverage, or strengthen its fund life. After all, without these the breadth of its reach, SSS still requires partnerships with stakeholders, SSS would not have lasted all these years. other agencies and institutions so that social security benefits and services meet the members’ needs in a timely and accurate manner. In 2010, SSS continued developing and enhancing its electronic and Internet-based-services in order to serve members faster and easier. The SSS management also met with other social security, business and economic experts during various conferences to share ideas, knowhow and experiences in order to improve services, policies and programs.12 2010 AN N UAL REPORT 13
  • 9. 2010 iN REViEW Celebrating SSS’ 53 years The SSS celebrated its 53rd Anniversary on 01 September 2010. Anchored on the theme “SSS: Kabalikat sa Tuwid na Landas sa Pagbabangon ng Pilipinas”, this celebration highlighted SSS’ continued commitment in promoting the welfare of all Filipino workers and their families, alongside the government’s efforts to eliminate poverty and improve the quality of life of every Filipino through good governance. Developing SSS Employees Going hand-in-hand with strengthening SSS as an institution is developing the skills and knowledge of its employees, as well as looking after their well-being. In 2010, the SSS Rationalization program was fully implemented, which saw the reorganization of key units in the main office and branches, the realignment of positions and job levels, as well as the absorption of long- serving service bureau personnel into the regular workforce.14 2010 AN N UAL REPORT 15
  • 10. sPECiAL ARTiCLE THE UMID: ITS MANDATE SSS as lead agency: From SS card to UMID The UMID stands for “Unified Multi-Purpose Identification.” This Initially, the National Economic Development Authority (NEDA) idea was initiated by the Executive Department of the National took the lead in conceptualizing the machinery of UMID up to Government and the effort was reinforced through the issuance the preparation of the initial draft of the implementing Rules of an Executive Order (EO) No. 420 s.2005, that mandated all and Regulations (IRR). In 2008, however, an amendment SPECIAL EVENTS. government agencies and government-owned and controlled to EO 420-s,2005 was issued identifying the social security corporations to streamline and harmonize their ID system. Identification system as the core of the UMID and directing the SSS to lead in its implementation. This is because in 1998, the UMID aims to: SSS acquired a fingerprint biometric-based system for the social PROJECTS. security card. Over 11 million social security cards, so far, had SPECIAL (1) reduce costs and thereby lessen the financial burden on both the government and the public brought about by the use of multiple ID cards and the maintenance of redundant databases containing the same or related information; been generated and issued through this system until April 2010 when card production was stopped due to facility breakdown. The social security card has gained integrity as a reliable ID card. Through the years, banks, business establishments, the (2) ensure greater convenience for those transacting courts and other government agencies, including the passport- business with the government and those availing of issuing office use this for identification of its holder, who government’s services; transacts business with them. (3) facilitate private businesses and promote the wider use of the unified ID card; The SSS endeavored to upgrade its system, factoring in the IMPLEMENTATION OF THE CONDONATION (4) enhance the integrity and reliability of government- availability of new technologies that observe international issued ID cards; and standards, similar to the machine-readable travel documents LAW ON PENALTY ON CONTRIBUTIONS by the International Civil Aviation Organization. (5) facilitate access to, and delivery of, quality and effective Republic Act No. 9903, otherwise known as the “Social Security government service. The success of the program was brought about by the conduct of Condonation Act of 2009,” was signed into law by former President a massive information campaign–both at national and local levels. After painstaking efforts to upgrade the system that uses Gloria Macapagal-Arroyo on 07 January 2010. It took effect on The campaign consisted of print replacements; brochures and The UMID system includes minimum safeguards, as follows: biometric technology and fingerprint matching to determine a 01 February 2010. Pursuant to the law, the Social Security flyers; posters, banners and streamers; press releases; and radio/TV person’s identity, an over-all system design came to the fore Commission (SSC), under its Resolution No. 110 s.2010 dated 10 interviews. The guidelines for the Program were published in the (1) The data to be recorded and stored, which shall be with the concurrence of UMID participating-agencies. This February 2010, issued the rules and regulations for the effective SSS website and intranet. used only for purposes of establishing the identity of UMID card has three core components: implementation of the said Act. a person, shall be limited to those specified in the EO; The implementing rules provided measures that ensure the (2) In no case shall the collection or compilation of other (1) The CRN, the unique number generated and assigned Under the said condonation law, any employer who is protection of the rights of SSS members. Should the settlement data in violation of a person’s right to privacy be by the central verification system to an individual delinquent on his payment or has not remitted all contributions of contributions through full payment or installment result in allowed or tolerated; upon successful enrollment into CRN Registry. CRN due and payable to the SSS, must, within six (6) months from its additional benefits for contingencies that have occurred prior to (3) Stringent systems of access control to data in the is needed for cross-verification to ensure integrity and effectivity, (a) remit said contributions; or (b) submit proposal to the date of settlement or shall occur within the installment period, identification system shall be instituted; reliability of identification. Once assigned, the CRN is pay the same in installment within a period not exceeding forty- the employer shall pay the SSS damages in accordance with the (4) Data collected and stored for this purpose shall be permanent; eight (48) months. provision of the Social Security Act. kept and treated as strictly confidential. A written (2) The CRN Registry, which contains the records of authorization of the Owner of the identification card individuals enrolled and assigned with CRN; and As of 02 August 2010, the last day of the six-month availment Although the availment period for the Condonation Program has shall be required for access and disclosure of data as (3) The UMID Card, the secured medium which contains period, a total of 24,043 employers availed of the Program, with already ended, a delinquent employer may still avail of other total obligation of P3,545,916,077 and condoned penalty of well as for any correction or revision of relevant data, the CRN. This can be presented by the individual as payment modes either under SSC Circular No. 6-P (Amended P3,423,935,010. Of those who availed, 15,591 (65%) employers or under such conditions as the participating agency proof of his identity. Dacion en Pago pursuant to Res. No. 29 dated 16 January 2002), with total obligation of P710,345,281 (20%) paid in cash, while or Circular No. 2011-002 (Revised Guidelines in the Installment issuing the identification card may prescribe; and 8,451 (35%) employers availed of an installment scheme where Payment Scheme for Employers pursuant to Res. No. 976-s.2010 (5) The identification card to be issued shall be protected The data to be collected and recorded by the UMID the current obligation of P500,118,723 (14.1%) was paid in cash, dated 08 December 2010). by advanced security features and cryptographic participating-agencies are the following: and the remaining obligation of P2,335,452,073 (66%) to be paid technology. on installment basis. Excluded from the count of availees are those (1) Name; “who, before the effectivity of the Act, have settled all contributions The UMID is not a national ID nor is it compulsory to all (2) Home Address; but with accrued penalties” or those whose obligation consists of Filipino citizens. It will be issued only for the constituents (3) Sex; penalty only. The penalties of employers who belong to this group of the participating agencies – Social Security System (SSS), (4) Picture; are condoned by operation of law. Government Service Insurance System (GSIS), Philippine (5) Signature; Health Insurance Corporation (PHIC), and National Home (6) Date and place of birth; Mortgage Finance Corporation (NHMFC). Licenses issued by (7) Marital status; the Land Transportation Office (LTO), Professional Regulation (8) Names of parents; Commission (PRC), and ID issued in conformity with treaties (9) Height; and international law, like passports and seaman’s ID, are (10) Weight; excluded in the system. These agencies, however, may join the (11) Two index fingers and two thumbmarks; UMID, if they so desire, by adopting the Common Reference (12) Any prominent distinguishing features; and Number (CRN) into their own system and by following other (13) Taxpayer Identification Number. legal pertinent requirements.16 2010 AN N UAL REPORT 17
  • 11. sPECiAL ARTiCLE The UMID System: Its Targets 2010 SSS FAMILY DAY All participating agencies are allowed to undertake enrollment The SSS Family Day is an annual System-wide activity or data capture subject to the set of enrollment standards that encourages camaraderie and the strengthening of the developed by the National Technical Working Group for record relationship and familiarity among SSS employees and their formats of demographic and biometric data. Prior to deployment families. The 2010 SSS Family Day mirrored such an interaction of enrollment stations, the compliance with such standards shall and the SSS compound became a venue for what we considered undergo a test by a conformance laboratory and a Certification as a momentous and joyful event the memory of which we process. For its part, the SSS deployed 131 enrollment stations shall always treasure. in 95 SSS branches which have an individual capacity of 70 captures per day on an eight-hour basis. The 2010 SSS Family Day for the Main Office was concluded in four (4) separate events. This was divided into four (4) groups, All outputs by the enrollment stations are inputs to a central namely (1) the Social Security Commission and President’s verification system (CVS). The CVS employs a civilian automated Group, (2) IT Management Group and the Program Manage- two-fingerprint identification system (AFIS). The accuracy ment Group, (3) the Controllership Group and Branch Opera- requirement of the AFIS is 99.5% true accept rate and 0.01% tion (Corporate Offices), and (4) the Administration Group and false accept rate. The “True Accept rate” is the percentage of Investments Sector. times the AFIS correctly verifies a true claim of identity. On the other hand, “False accept rate” is the percentage of times The Social Security Commission and President’s Group con- the AFIS produces a negative claim of identity. In statistics, the ducted theirs at the MAC building, Diliman, Quezon City on 20 former is the probability of acceptance given that the claim of November 2010. Major activities included installing a photo identification is true, while the latter refers to the probability booth, parlor games and entertainment/videoke-singing. The that the claim is false. The CVS has a matching speed of 1,000 group had a total of 339 attendees. (322 employees and family enrollments per hour 24/7. The 11.5 million person-records in members). the old SSS AFIS were already migrated in the CVS. The capacity of CVS with Blade System as primary server, is scalable up to 25 The IT Management and the Program Management Groups, million person-records within five years. respectively, conducted their Family Day at the SSS Canteen, The corresponding ID number issued by the participating Main Office Bldg., Quezon City on 26 November 2010. Major agencies and the CRN shall form part of the stored ID data in Upon successful enrollment, the applicant shall be issued activities included bingo sosyal, raffle draw, fun games, and the CRN Registry. The custodian of the registry is the National with CRN. For practical reasons, the agreed upon CRN- videoke-singing. The group had a total of 465 attendees. (438 Statistics Office (NSO). format adopts the algorithm in the social security number. employees and family members). The CRN and the enrollment data shall be sent to the card The task is to move from the social security card, the core of production system. All participating agencies can establish The Controllership Group and Branch Operations (Corporate the System to UMID card, to the one-look, one-format card its own card factory. Offices) conducted their Family Day at the SSS Main Office for all. The dimension of both cards complies with the ISO Building (Front Lobby) on 20 November 2010. Major activities standards. The social security card is basically teslin, while In the case of the SSS card production system it has a Card included film showing, raffle draw, team activities, and photo UMID is Polyethylene Terephthalate Glycol/Poly Vinyl Chloride Management System (CMS) that maintains ID card applications souvenir. The group had a total of 534 attendees. (275 employ- (PETG/PVC). The former is 2D-barcode-based, while the latter and a Key Management System (KMS) which grants the authority ees and family members). is a contactless card. Both cards are with a guaranteed life of to load application in the card. The KMS has the capability five years. to implement Public Key Infrastructure (PKI) solutions. The The Administration Group and Investments Sector conducted card chip operating system can run applications which are their family day at Club Manila East Resort and Hotel at Taytay, developed by third-parties. This is another initiative by the Rizal on 20 November 2010. Major activities included parlor The data that appear on the front side of both card the Republic National Government. games and water sports, cheering contest, videoke challenge of the Philippines, the face and ghost image of the member, his raffle draw and swimming. The group had 570 attendees. (458 full name and his signature. The printing of birthdate is optional The use of the UMID card may be in the form of visual employees and family members). in the social security card, but mandatory in the UMID. The inspection, a one-to-one AFIS verification through an ATM social security card shows the social security number of the machine, or a contactless card reader. There were a total of 1,891 regular employees, Service Bureau member, while the UMID shows the CRN. The address of the and Job Order personnel who attended the SSS Family Day. member is not printed on the social security card, while it is in The UMID targets: 70 enrollments per eight-hour day; 25 Over-all the number of attendees including family members the UMID card. There is a magnetic stripe on the back side of million enrollees in five years; and 12 million UMID cards in were 1,510. both cards, basically for ATM-type of transactions. five years. As a matter of strategic procedure, priority shall be given to those who have no social security card yet.18 2010 AN N UAL REPORT 19
  • 12. sPECiAL ARTiCLE THE SSS MUSEUM AND SSS LIBRARY: More than repositories of artifacts and documents Visiting a museum is often stereotyped as an activity confined to those going on a school trip or for members of the middle or upper classes. In reality, however, a trip to a museum can be enjoyed by all and can be both a pleasurable and educational experience. The primary role of a museum is to be a source of education, whether through showcasing collections of cultural products such as pieces of art, telling the story of something important, such as an historical event, or raising awareness of a societal concern, such as poverty. The goal of a museum is to ensure that upon leaving, each visitor knows something that they did not know when they entered. The documentary materials held in museums constitute a vast resource. At a minimum, they consist of institutional records, operational and personnel records, documentation of collections, manuscripts and photographs – in short, the historical memory of an institution and its activities. Museums generally collect, preserve, use and house artifacts for the benefit of society. Museums can be chartered as independent, non-profit organizations, or in special cases, as part of a corporation. On 01 September 2010, as part of its 53rd Anniversary 2010 STAFFING AND OTHER HUMAN and Specialized Examinations, scheduling for CSC Professional celebration, the SSS inaugurated its twin facilities for the public: eligibility examination and counseling for their college the new SSS Museum and the expanded SSS Library. Located RESOURCE MANAGEMENT DIRECTIONS academic course completion. at the basement of the SSS Main Office in Diliman, the two facilities serve as more than a repository of documents, paintings The implementation of the Staffing Plan which started in 2009 or memorabilia. They are the institutional memory bank of Human Resource Management (HRM) Division’s priorities paved the way for another milestone in the implementation of the SSS. focus on the review and enhancement of job functions the SSS approved Rationalization Plan. and qualification requirements of plantilla positions and in the formulation of intensified approaches to training and The SSS Museum is a special kind of museum in that it One of the roll-out activities was to gradually fill-in the holds original documents, printings, photographs and other development programs. This is pursuant to the call of the vacant positions created as a result of the restructuring and memorabilia that show a vivid picture of the SSS and the Management to streamline and automate processes towards the movements and separation of employees, over a period of development of social security in the Philippines. enhanced governance and operational efficiency that would ten years. The initial phase of the staffing plan focused on the redound to meeting members’ expectation and satisfaction. Meanwhile, the SSS Library, formerly housed at the 12th floor absorption of qualified and deserving Service Bureau personnel as directed by the Social Security Commission through SSC of the Main Building, was moved to the basement in a more Along with these, the new Performance Evaluation System spacious area beside the SSS Museum in response to the Resolution No. 509, s. 2009 which led to the regularization of for both Executives and Rank & File employees will be ready growing number of users interested in social security. The SSS 1,131 SBs and the promotion of 68 rank and file employees. for implementation before the end of 2011. This will ensure Library contains an expansive collection of books, magazines, the continuous improvement of individual and organizational journals, and other reference materials on social security, In 2010, a total of 1,089 positions were filled through the business and economics, social sciences, labor, and law. performance and will serve as basis for performance-based promotion and lateral transfer of 853 regular employees, Publications from the World Bank, the International Labour personnel actions (promotions, training & development, absorption of 206 SB personnel and direct-hiring of 30 external Organization, the International Social Security Association, scholarships) and incentives and rewards. Likewise, the applicants for technical and specialized positions as well as and other international institutions are likewise available. implementation of the Human Resource Information System promotion of qualified and deserving Officers-in-Charge (OICs) (HRIS) will address critical human resource and organizational to 117 executive positions. As a way to cater to the information needs of the public, both the requirements and ensure maximized productivity of the SSS SSS Museum and Library have no entrance or user fees. The SSS workforce. Museum is open to visitors from Tuesdays to Fridays, 9:00 am to An assistance plan was implemented by the Management to further support the SBs preparation to complete their 5:00pm, and Saturdays, 9:00am to 12 pm. Meanwhile, the SSS qualification requirements. This assistance included the Library is open from Tuesdays to Fridays, 9:00 am to 6:00pm. conduct of review sessions for CSC Examination and Qualifying20 2010 AN N UAL REPORT 21
  • 13. sPECiAL ARTiCLE SSS IN 2011 AND BEYOND HEEDING THE CALL FOR Driven by the insurance principle that gave expression to the service. In particular, the SSS is determined to implement the solidarity of workers and employers, the SSS aims to increase new Disability Program, the enhanced Annual Confirmation TRANSFORMATIONAL CHANGE the participation of both parties in securing a viable social of Pensioners, and the new guidelines on the Funeral Benefit security protection. SSS shall pursue on increasing the existing of members. This year will also mark the full implementation Truly, 2010 was the year of transformation as the nation faced monthly salary credit to PHP 20,000. Also, an increase in the of the Anti-Red Tape Act that will ensure fast delivery of SSS a decisive point to ameliorate the helm of the country. As contribution rate by 0.6 percent that will be equally shared services to its members while expanding the Branch Queue soon as the first automated elections concluded the historic between the covered employee and employer will also be Management System which aims to manage the queuing endeavor, the Philippines became a realm of reform as the new pursued to rev up the financial viability of the fund and keep system of the SSS as transacting stakeholders crowd our offices. administration has made transformation as the cornerstone of it at par with its international counterparts. Furthermore, the its agenda. SSS plans to increase its collection efforts on erring employers Optimize Investments through the implementation of the revised installment payment As such, the arising transformational trend immediately crawled and dacion-en-pago guidelines. The change of the national stewardship last year paved way its way through the labyrinths of the government as the different to the renewal of investor sentiment in the country evidenced institutions and agencies of the state like the SSS embraced the The arising trend on labor migration in the Philippines is also by the record high performance of the local bourse as well as refreshing direction. highlighted in the planned priorities of SSS in 2011. In this the surging inflow of foreign portfolio investments. The SSS regard, SSS plans to serve the growing number of overseas will harness the benefits of this opportunity to enhance the For its part, the SSS witnessed a major change in its leadership Filipino workers (OFW) by opening more foreign branches in productivity of its investments which play a crucial role in the as it welcomed a new set of stewards who are expected to countries mostly flanked by our migrant workers. In addition, well-being of the fund. steer the fund to greater heights. Building on the foundations of the SSS will also review the manning levels of existing foreign transformational change, the SSS is geared to continue pursuing branches to increase the efficiency of each of these branches. This year, SSS is looking at tapping the expertise of local fund its mission of promoting the country’s development through the The welfare of our sea-based members will also be prioritized managers in identifying the most optimal investment strategy provision of meaningful social protection and sound investment through the development and implementation of the revised for SSS as well as establishing a benchmark in evaluating the decisions. policy requiring their mandatory coverage to SSS. Moreover, the performance of the adapted strategy. Moreover, the SSS is ardent SSS shall pursue on forging a memorandum of agreement with on upgrading its trading system complemented with state-of-the- This year, the SSS is poised to revitalize its idea of service delivery the Department of Labor and Employment and the Philippine art facilities that will further bolster its equities income. by concentrating its efforts on six action areas identified by the Overseas Employment Administration on the attempt of renewed management: (1) Expand Social Security Coverage, (2) mandatorily covering both newly hired and rehired OFWs. SSS The government’s advocacy of promoting economic Make SSS benefits more meaningful, (3) Optimize investments, also intends to delineate the functions of its Foreign Operations, development in the country by forging partnership with the (4) Improve service delivery, (5) Re-engineer the organization, International Affairs and Online Support Services, which, in the private sector will also be heeded by SSS through optimizing its and (6) Pursue charter amendments. meantime, are the departments catering to all the transactional institutional lending facility as an alternative investment outlet. needs of OFW members. This endeavor will allow the SSS to balance its bureaucratic Expand Social Security Coverage commitment and its institutional responsibilities. Make SSS Benefits More Meaningful As the country’s premier social security provider, the role of SSS Improve Service Delivery in raising the level of coverage to social security in the country The advent of a revitalizing change promulgated by the new is vital. Every attempt to keep SSS closer to the members must administration inspired state agencies and institutions like the The SSS is cognizant of its duty to provide its members with be astute to, gradually, achieve its vision of universal coverage SSS in incorporating the newfound advocacy in performing their more value to their social security. With the magnitude of to social security in the country. respective mandates. With this, the SSS will further its earnest transactions within the institution, a complex system of commitment in providing meaningful benefits to its members information and communication technology (ICT) is vital to In 2011, the SSS shall embark on heightened efforts of by developing policies and programs that would reaffirm the improving the efficiencies and maintaining the integrity of the stimulating members to actively pay their contributions and role of SSS as a reliable partner in times of distress. institution. regain their entitlement to the package of benefits under the social security program through the expansion of payment In this regard, the SSS shall develop a voluntary provident fund This year, the SSS shall embark on efforts to re-engineer schemes and self-service terminals. Inspired by the efficiency program for the retirement of local workers benchmarked from the business processes of the system as well as deploy the of today’s technology, the SSS shall continue to empower its the success of retirement programs of various agencies as well appropriate ICT resources needed in the frontline and backroom members by providing easier access to information on their as the existing provident fund program of the OFW members services. Also, the SSS plans to instigate the automation of office social security through the expansion of various self-service of SSS. This endeavor is envisioned to be a means of promoting procedures through the implementation of the Automated facilities. Moreover, the SSS shall continue to forge partnerships individual savings as a catalyst of growth. Records Management System. This is crucial to the goal of SSS with various government and non-government institutions for in providing faster and more accurate delivery of services by the coverage of special sectors as well as continue accrediting In 2011, the SSS shall introduce new policies that would reducing human intervention in its procedures. cooperatives and associations as collecting agents to boost ascertain our prompt response to the growing call for collections. transformational change in the country through better public As we strive to develop and maintain the trust of our members, service. These policies will revolve within the bounds of it is imperative that the SSS upholds utmost integrity of its better administration of benefits and more efficient delivery of database. The SSS shall revive its database clean-up project22 2010 AN N UAL REPORT 23
  • 14. Re-engineer the Organization Last year marked the changing of the guards of the country’s premiere social security provider. The highest policy making body and the chief executive post of the SSS was rejuvenated with highly-experienced individuals chosen for their sheer competence and fervor to lead the fund towards greater success. As a result, the call for a system-wide reinvigoration was accentuated to respond to the changes in the bureaucratic and corporate environment. In this regard, the SSS is set to implement an appropriate organizational structure responsive to times as well as establish an organization-wide performance evaluation system benchmarked on the best practices of other agencies and organizations. Inspired by the ergonomic design of private banks, the SSS shall review the functions as well as the layout of its branches to determine the standards in improving service delivery to its members. These programs are the working manifestations that the SSS is ardent in responding to the rousing call for transformational 2010 change within the country’s bureaucracy. Pursue Charter Amendments FINANCIAL As we continue to scout for ways to advance the social security protection in the country, the charter that dictates our very purpose must also be receptive to the changing times. The which aims to correct inaccurate member information which is charter itself must institutionalize the ability of SSS to respond crucial in determining the level of benefits that a member can and innovate as changes occur in the context of social security be entitled with. To boost its efforts in upholding the integrity in the Philippines. STATEMENTS of its database, SSS shall establish links with the databases of other government agencies which will also serve as a ground With this, the SSS shall undertake measures to pursue its charter for cooperation in achieving overall improvement of public amendments to keep it abreast with the growing social security service. This inter-agency cooperation is also in time with the demands of the country. We will be attentive to these needs as plans of SSS to fully implement the Unified Multi-Purpose we finalize our recommendations on the charter amendments. Identification System in its transactions. To ensure the incessant progress, we will actively participate in public hearings and dialogues concerning our charter’s Along with the synchronized efforts of extending access and amendments. ensuring the viability of social security, improving service delivery through the employment of the proper ICT makes Conclusion: Responding to the Eminent Call the SSS one step closer to achieving its mandate of universal coverage to social security in the country. This only proves that Over the years, SSS has remained consistent with its efforts of the ICT structure is considered the backbone of efficient SSS enhancing the insurance fund of its hardworking members. operations. With the advent of transformational reforms, the coverage of our efforts have extended from simple social security coverage to promoting the social security in the country through impeccable and professional delivery of service and more meaningful benefits to our members. Indeed, the SSS is dedicated to help its members maximize each hard-earned peso to secure a stable future for him and his beneficiaries. SOCIAL SECURITY SYSTEM24
  • 15. fiNANCiAL sTATEMENTs2010 S t a t e m e n t o f M a n a g e m e n t ’s R e s p o n s i b i l i t y f o r S t a t e A u d i t o r ’s R e p o r t o n the Financial Statements the Financial Statements The Social Security Commission Social Security System East Avenue, Diliman, Quezon City SOCIAL SECURITY SYSTEM We have audited the accompanying financial statements of Social Security System, which comprise the statement of financial position as at December 31, 2010, and the statement of comprehensive income, statement of changes in reserves and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Management of Social Security System is responsible for all information and representations contained in the consolidated Auditor’s Reponsibility financial statements as of December 31, 2010 and 2009. The financial statements have been prepared in conformity with the Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International accounting principles generally accepted in the Philippines, and reflect amounts that are based on the best estimates and informed Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatements. judgement of Management with an appropriate consideration to materiality. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In this regard, management maintains a system of accounting and reporting which provides for the necessary internal controls to In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the ensure that transactions are properly authorized and recorded, assets are safeguarded against unauthorized use or disposition, and entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. liabilities are recognized. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. The Social Security Commission reviews the consolidated financial statements before such statements are approved and submitted Bases for Qualified Opinion to the President of the Philippines and to the Congress of the Philippines. As reported in Observation Nos. 2, 4, 5, 6, 7 and 8 of the audit report, the accuracy of the Receivable - Member Loans (ML), Housing Loan and Receivable-Real and Other Property Acquired (ROPA), Regular Real Estate Loans (REL), Receivable - Collecting Bank-Regular, Cash Collecting Officer (CCO) and the Cash in Bank (CIB) accounts with balances of P43.292 billion, P5.255 billion, P3.502 billion, P3.044 billion, P683.706 million and P11.041 million, respectively, cannot be ascertained due to, among others: • Collections from members of P5.793 billion that were not yet deducted from their loan accounts, of which P3.586 billion were distributed based on estimate and without corresponding posting to members’ accounts, and the P926.714 million variance between the general ledger and aging schedule; • REL repayments of P2.018 billion remained not recorded or posted to the ledgers, and the REL regular account were not disabled in the REL System when these were restructured and new accounts were created, resulting in the distribution of repayments to both accounts totaling P165.224 million; JUAN B. SANTOS EMILIO S. DE QUIROS, JR. ELVIRA G. ALCANTARA-RESARE • A temporary subsidiary ledger account of P3.018 billion and a negative balance of P5.194 billion from 88 banks, some already closed or merged with Chairman, SS Commission President and CEO Officer-in-Charge other banks, representing collections already remitted to SSS but not yet posted to members’ accounts; Controllership Division • Discrepancy of P528.479 million between the balances of the CCO – Main Office account and the Cashbook and the Report of Undeposited Collections due to prior and current years’ collections not matched with deposits, delayed validation of OFW collections, and deposit not closed to clearing account; and • Unaccounted Migration Cash in Bank (MIG-CIB) affecting the CIB-Euro/Dollar/Peso Savings/Current Account in the amount of negative P626.41 million and the CIB–Working Fund account of P643.834 million. Opinion In our opinion, except for the effects of the matter described in the Bases for Qualified Opinion paragraph, the financial statements present fairly, in all material respects, the financial position of the Social Security System as at December 31, 2010, and its financial performance and its cash flows for the year then ended in accordance with Philippine Financial Reporting Standards. COMMISSION ON AUDIT DELIA D. AGATEP State Auditor V Supervising Auditor August 26, 201126 2010 AN N UAL REPORT 27
  • 16. fiNANCiAL sTATEMENTs 2010 Statement of Statement of Financial Position Comprehensive Income dECEMBER 31, 2010 fOR ThE YEAR ENdEd dECEMBER 31, 2010 (in Philippine Peso) (in Philippine Peso) Notes 2010 2009 Notes 2010 2009 ASSETS Revenues Members’ contribution 79,272,860,300 72,350,893,036 Current Assets Investment and other income 21 27,847,894,686 22,985,618,802 Cash and cash equivalents 3 7,378,656,013 8,995,402,491 Held-to-maturity investments 4 7,397,607,090 13,293,628,605 107,120,754,986 95,336,511,838 Held-for-trading financial assets 5 3,330,769,671 979,839,420 Receivables 6 6,999,366,607 5,334,882,298 Expenditures Other current assets 7 88,945,464 117,762,834 Benefit Payments 22 25,195,344,845 28,721,515,648 Retirement 38,226,764,028 35,126,490,608 Non-Current Assets Death 27,648,690,657 25,962,639,582 Non-current Financial assets 8 250,408,102,813 223,472,303,766 Maternity 3,634,831,332 3,589,163,852 Investment property 9 12,129,126,734 10,895,675,521 Disability 3,362,393,087 3,253,748,170 Property and equipment 10 3,318,749,960 3,413,685,287 Funeral grant 2,488,203,147 2,377,398,534 Intangible assets 11 208,582,776 164,934,237 Sickness 1,777,593,577 1,703,782,723 Non-current assets held for sale 12 5,771,908,785 5,404,768,660 Medical services 35,565,635 36,651,721 Other non-current assets 13 559,524,623 537,767,300 Rehabilitation services 115,985 82,815 272,395,995,691 243,889,134,771 77,174,157,448 72,049,958,005 Total Assets 297,591,340,536 272,610,650,419 Operating Expenses Personal services 23 5,271,665,639 4,730,723,529 LIABILITIES Maintenance and other operating expenses 24 1,842,745,190 2,343,867,852 Current Liabilities 7,114,410,829 7,074,591,381 Accounts payable and accrued expenses 14 3,238,381,868 3,248,103,762 Funds held in trust 15 778,135,832 623,290,176 84,288,568,277 79,124,549,386 Deferred income 16 83,210,203 93,384,621 Other current liabilities 17 3,002,051,161 1,947,038,162 Net Revenues 22,832,186,709 16,211,962,452 7,101,779,064 5,911,816,721 Other Comprehensive Income/(loss) Non Current Liabilities Available-for-sale financial assets Accrued retirement benefits 18 1,384,768,341 1,359,174,889 Reclassification adjustments (6,497,262,229) (3,869,835,841) Rent payable 19 9,759,875 9,840,971 Gain on fair value adjustment 7,555,937,265 27,199,674,473 Revaluation increase - land - 277,700,739 1,394,528,216 1,369,015,860 Settlement of claims for disallowed payments - (11,313,834) Total Liabilities 8,496,307,280 7,280,832,581 1,058,675,036 23,596,225,537 RESERVES 20 289,095,033,256 265,329,817,838 Total Comprehensive Income for the Year 23,890,861,745 39,808,187,989 TOTAL LIABILITIES AND RESERVES 297,591,340,536 272,610,650,419 See accompanying notes to financial statements. See accompanying notes to financial statements.28 2010 AN N UAL REPORT 29
  • 17. fiNANCiAL sTATEMENTs 2010 Statement of Statement of Changes in Reserves Cash Flows fOR ThE YEAR ENdEd dECEMBER 31, 2010 fOR ThE YEAR ENdEd dECEMBER 31, 2010 (in Philippine peso) (in Philippine peso) Notes 2010 2009 Cash flows from operating activities Gain/(loss) on fair Members’ contribution 79,272,860,300 72,350,893,036 value adjustment Property Investment and other income 21 16,099,119,714 14,689,520,657 of available for-sale valuation Contingent Donated Payments to members and beneficiaries (77,278,979,616) (72,061,527,723) Notes Reserve fund financial assets reserve surplus property Total reserves Payments for operations (7,154,956,505) (6,531,397,668) Balance, 1 January 2010 237,458,434,323 26,347,427,214 1,505,523,674 7,040,647 11,391,980 265,329,817,838 Operating income before changes in operating assets and liabilities 10,938,043,893 8,447,488,302 Corporate operating budget of Employees’ Compensation (Increase)/decrease in operating assets Commission and Occupational Held-for-trading financial assets (835,334,809) 717,013,283 Safety and Health Center (125,646,327) - - - - (125,646,327) Receivables 6 (991,909,512) 992,815,389 Other operating assets (458,135,984) (26,484,820) Total comprehensive income for the year 22,832,186,709 1,058,675,036 - - - 23,890,861,745 Increase/(decrease) in operating liabilities Funds held in trust 154,845,656 101,026,873 BALANCE, 31 DECEMBER 2010 20 260,164,974,705 27,406,102,250 1,505,523,674 7,040,647 11,391,980 289,095,033,256 Other current liabilities 1,055,012,999 (568,583,093) BALANCE, 31 DECEMBER 2009 20 237,458,434,323 26,347,427,214 1,505,523,674 7,040,647 11,391,980 265,329,817,838 Net cash generated from operating activities 9,862,522,243 9,663,275,934 See accompanying notes to financial statements. Cash flows from investing activities Loan releases and other investment purchases, net (11,147,603,134) (7,018,112,473) Acquisition of property and equipment, net 10 (158,721,227) (408,964,165) Acquisition of intangible assets, net 11 (47,298,033) (33,592,244) Net cash used in investing activities (11,353,622,394) (7,460,668,882) Cash flows from financing activities Corporate operating budget of Employees’ Compensation Commission and Occupational Safety and Health Center (125,646,327) (81,315,097) Net increase/(decrease) in cash and cash equivalents (1,616,746,478) 2,121,291,955 Cash and cash equivalents at beginning of year 3 8,995,402,491 6,874,110,536 Cash and cash equivalents at end of year 3 7,378,656,013 8,995,402,491 See accompanying notes to financial statements.30 2010 AN N UAL REPORT 31
  • 18. fiNANCiAL sTATEMENTs 2010 Notes to Financial Statements (All amounts in Philippine peso unless otherwise stated) 1. REPORTING ENTITY policies and the reported amounts of assets, liabilities, revenue Equity instruments that are held for trading will be or held for the purpose of selling in the short term or and expenses. However, uncertainty about these assumptions measured at fair value through profit or loss. For all for which there is a recent pattern of short-term profit The Social Security System (SSS) administers social security protection and estimates could result in outcomes that could require a other equity investments, an irrevocable election can taking. to workers in the private sector. Social security provides replacement material adjustment to the carrying amount of the affected be made at initial recognition, to recognize unrealized income for workers in times of death, disability, sickness, maternity asset or liability in the future and realized fair value gains and losses through other Upon initial recognition, attributable transaction costs and old age. On 1 September 1957, the Social Security Act of 1954 was comprehensive income rather than profit or loss. There are recognized in profit or loss as incurred. Financial implemented. Thereafter, the coverage and benefits given by SSS have Judgments, estimates and assumptions are continually shall be no recycling of fair value gains and losses assets at fair value through profit or loss are measured been expanded and enhanced through the enactment of various laws. evaluated and are based on historical experience and other to profit or loss. This election may be made on an at fair value and changes therein are recognized in On 1 May 1997, Republic Act (RA) No. 8282, otherwise known as the factors, including expectations of future events that are believed instrument-by-instrument basis. Dividends are to be profit or loss. “Social Security Act of 1997”, was enacted to further strengthen the to be reasonable under the circumstances. presented in profit or loss as long as they represent a SSS. Under this Act, the government accepts general responsibility for return on investment. d.2 Held-to-maturity financial assets the solvency of the SSS and guarantees that prescribed benefits shall 2.2 New standards, interpretations and amendments to published not be diminished. Section 16 of RA 8282 exempts the SSS and all its standards While adoption of PFRS 9 is mandatory from 1 January Held-to-maturity financial assets are non-derivative benefit payments from all kinds of taxes, fees or charges, customs or 2013, earlier application is permitted. The SSS is financial assets with fixed or determinable payments import duty. a. Effective in 2010 that are relevant to SSS currently assessing the implications and impact of PFRS and fixed maturity for which there is the positive 9 and it is not practicable to provide reasonable estimate intention and ability to hold to maturity. They are The SSS is a financial institution in the Philippines. Its principal office a.1 2009 Annual Improvements to PFRS of the effect until a detailed review has been completed. recognized initially at fair value plus any directly is in East Avenue, Quezon City. attributable transaction costs. Subsequent to initial The Financial Reporting Standards Council (FRSC) 2.3 Financial assets recognition held-to-maturity investments are The financial statements include the accounts of Employees’ has adopted the Improvements to PFRS 2009. Among measured at amortized cost using the effective interest Compensation and State Insurance Fund, which is being administered those improvements, only the following amendments a. Date of recognition method, less any impairment in value. by the SSS, as provided for by Presidential Decree No. 626, as amended. were identified to be relevant but not expected to have All inter-fund accounts have been eliminated. material effects on the financial statements: The SSS initially recognizes loans and receivables and Gains and losses are recognized in profit or loss when deposits on the date that they are originated. All other the held-to-maturity financial assets are derecognized The accompanying financial statements were approved and a.1.1 PAS 7 (Amendment), Statement of Cash Flows financial assets are recognized initially on the trade date or impaired, as well as through the amortization authorized for issue by the Social Security Commission on 25 May (effective from 1 January 2010) at which the SSS becomes a party to the contractual process. 2011 under its Resolution No. 591-s.2011. provisions of the instrument. The amendment clarifies that only an expenditure d.3 Loans and receivables that results in a recognized asset can be classified as b. Initial recognition 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a cash flow from investing activities. Presently, the Loans and receivables are financial assets with fixed SSS classified only recognized assets as cash flow The SSS initially recognizes a financial asset at fair value. or determinable payments that are not quoted in The significant accounting policies that have been used in the from investing activities. Transaction costs are included in the initial measurement, an active market. Such assets are carried at cost or preparation of these financial statements are summarized below. These except for financial assets measured at fair value through amortized cost less impairment in value. policies have been consistently applied to all the years presented, unless a.1.2 PAS 17 (Amendment), Leases (effective profit or loss. otherwise stated. 1 January 2010) A loan or receivable is deemed impaired when it c. Determination of fair value is considered that it will probably not be possible 2.1 Basis of preparation The amendment clarifies that when a lease includes to recover all the amounts due according to the both land and building elements, an entity assesses The fair value of investments that are actively traded in contractual terms, or equivalent value. Significant a. Statement of compliance the classification of each element as finance or organized financial markets is determined by reference financial difficulties of the debtor, probability that the operating lease separately in accordance with the to quoted market bid prices. When current bid prices are debtor will enter bankruptcy and default or delinquency The financial statements of the SSS have been prepared in general guidance on lease classification set out in not available, the price of the most recent transaction in payments are considered indicators that such loans accordance with Philippine Financial Reporting Standards PAS 17. provides evidence of the current fair value as long as and receivables are impaired. (PFRS), Philippine Accounting Standards (PAS) and Philippine there has not been a significant change in economic Interpretations issued by the Financial Reporting Standards b. Effective subsequent to 2010 that are relevant to SSS but not circumstances since the time of the transaction. The SSS provides an allowance for impairment loss for Council (FRSC), where applicable adopted early 5 years and above delinquent member loan accounts. It For investments where there is no active market, fair value adopts the Bangko Sentral ng Pilipinas (BSP) Circulars b. Basis of measurement b.1 PFRS 9 Financial Instruments is determined using valuation techniques. Such techniques 210 Series of 1999 and 313 Series of 2001 in identifying include using recent arm’s-length market transactions, and monitoring problem loans and risk assets and The financial statements have been prepared on the historical Issued in November 2009 and amended in October reference to the current market value of another instrument, setting up of allowance for probable losses. BSP outlines cost basis except for the following items: 2010, PFRS 9 introduces new requirements for the which is substantially the same, discounted cash flow the following rates for the setting up of allowance for classification and measurement of financial assets and analysis and option pricing models. probable losses: • financial assets at fair value through profit or loss are financial liabilities and for derecognition. measured at fair value d. Classification Classification Allowances • marketable securities classified as available-for-sale are PFRS 9 requires all recognized financial assets that are Unclassified 0% measured at fair value within the scope of PAS 39 Financial Instruments: The SSS has the following non-derivative financial assets: Loans especially mentioned 5% • investment properties are measured at fair value Recognition and Measurement to be subsequently financial assets at fair value through profit or loss, held- Substandard • land under property and equipment are measured at measured at amortized cost or fair value. Specifically, to-maturity financial assets, loans and receivables and Secured 10% revalued amount debt investments that are held within a business available-for-sale financial assets. Unsecured 25% model whose objective is to collect the contractual cash Doubtful 50% c. Estimates and judgments flows and that have contractual cash flows from solely d.1 Financial assets at fair value through profit or loss Loss 100% payments of principal and interest on the principal The preparation of the financial statements in confirmity with outstanding are generally measured at amortized Financial assets at fair value through profit or loss PFRS/PAS requires management to make judgements, estimates cost at the end of subsequent accounting periods. All consist of held-for-trading financial assets. Held-for- and assumptions that affect the application of accounting other debt investments and equity investments are trading financial assets are financial assets acquired measured at their fair values at the end of subsequent accounting periods.32 2010 AN N UAL REPORT 33
  • 19. fiNANCiAL sTATEMENTs 2010 Member loan accounts that are subjected to An investment property is initially measured at cost, including Construction in progress (CIP) represents building and An impairment loss is reversed if there has been a change impairment fall under substandard which is defined transaction costs. Such cost should not include start-up costs, building/leasehold improvements under construction and is in the estimates used to determine the recoverable amount. as loans or portions thereof which appear to involve abnormal waste, or initial operating losses incurred before the stated at cost. CIP is not depreciated until such time as the An impairment loss is reversed only to the extent that the a substantial and unreasonable degree of risk to investment property achieves the planned level of occupancy. relevant assets are completed and put into operational use. asset’s carrying amount does not exceed the carrying amount the institution because of unfavorable record or After initial recognition, it is measured at fair value with any that would have been determined, net of depreciation or unsatisfactory characteristics. They are secured/backed change therein recognized in profit or loss. 2.8 Intangible assets amortization, if no impairment loss had been recognized in by members’ equity and benefits (i.e. all outstanding prior years. obligations of members at the time of their application Transfers to or from investment property are made when Acquired computer software/licenses are capitalized on the for final claim are being deducted from their claim there is achange in use, evidenced by: basis of the costs incurred to acquire and bring to use the 2.11 Revenue recognition proceeds). specific software. Computer software/licenses with finite lives • commencement of owner-occupation are amortized on a straight-line basis over their estimated Revenue is recognized to the extent that it is probable that d.4 Available-for-sale financial assets • end of owner-occupation useful lives, while those with indefinite useful lives or those the economic benefits will flow to the SSS and the amount • commencement of an operating lease to another party used perpetually or for as long as there are computers of revenue can be reliably measured. The following specific Available-for-sale financial assets are non-derivative compatible with them are carried at cost and tested annually recognition criteria must also be met before revenue is financial assets that are designated as available- 2.7 Property and equipment for impairment. recognized: for-sale and that are not classified in any of the other categories. Subsequent to initial recognition, Property and equipment, except land, are stated at cost less 2.9 Non-current assets held for sale a. Member’s contribution available-for-sale financial assets are carried at fair accumulated depreciation, amortization and any impairment value in the statement of financial position. Changes in value. Land is carried at revalued amount. Increase in value Non-current assets are classified as held for sale if their Revenue is recognized upon collection. in the fair value of such assets are recognized in other as a result of revaluation is credited to reserves under property carrying amount will be recovered through a sale transaction comprehensive income and presented within reserves valuation reserve unless it represents the reversal of a rather than through continuing use. This condition is regarded b. Interest income in the unrealized gain or loss on available-for-sale revaluation decrease of the same asset previously recognized as met when the sale is highly probable and the asset is financial assets portion. When an available-for-sale as an expense, in which case it is recognized as income. On available for immediate sale in its present condition. Revenue is recognized as the interest accrues, taking into financial asset is derecognized, the cumulative gains the other hand, a decrease arising as a result of a revaluation account the effective yield on the asset. or losses are transferred to profit or loss and presented is recognized as an expense to the extent that it exceeds any Assets classified as held for sale are measured at the lower as a reclassification adjustment within the statement amount previously credited to property valuation reserve of carrying amount and fair value less costs to sell. Any c. Dividend income of comprehensive income. Dividends on available-for- relating to the same asset. excess of carrying amount over fair value less costs to sell is sale equity instruments are recognized in profit or loss an impairment loss. No depreciation is recognized for these Dividend income is recognized at the time the right to when the right to receive payments is established. Cost includes all costs necessary to bring the asset to working assets while classified as held for sale. receive the payment is established. condition for its intended use. This would include not only If an available-for-sale financial asset is impaired, an its original purchase price but also costs of site preparation, Non-current assets held for sale include real and other d. Rental income amount comprising the difference between its cost delivery and handling, installation, related professional properties acquired (ROPA) in settlement of contribution (net of any principal payment and amortization) and its fees for architects and engineers, and the estimated cost of and member/housing/other loan delinquencies through Rental income is recognized on a straight-line basis over the current fair value, less any impairment loss previously dismantling and removing the asset and restoring the site. foreclosure or dation in payment. They are initially booked at lease term. recognized in profit or loss, is transferred from reserves the carrying amount of the contribution/loan delinquency plus to profit or loss and presented as a reclassification The cost of replacing a part of an item of property and transaction costs incurred upon acquisition. When the booked 2.12 Expense recognition adjustment within the statement of comprehensive equipment is recognized in the carrying amount of the item amount of ROPA exceeds the appraised value of the acquired income. Reversals in respect of equity instruments if it is probable that the future economic benefits embodied property, an allowance for impairment loss equivalent to the Expenses are recognized in the statement of comprehensive classified as available-for-sale are not recognized in within the part will flow to the SSS, and its cost can be excess of the amount booked over the appraised value is set income upon utilization of the service or at the date they are profit or loss. measured reliably. The carrying amount of the replaced part is up. incurred. derecognized. The costs of the day-to-day servicing of property e. Derecognition of financial assets and equipment are recognized in profit or loss as incurred. 2.10 Impairment of non-financial assets 2.13 Operating Leases Financial assets are derecognized when the rights to Depreciation is calculated over the depreciable amount less its The carrying amount of non-financial assets, other than The determination of whether an arrangement is, or contains receive cash flows from the asset have expired or have residual value. It is recognized in profit or loss on a straight- investment property and non-current assets held for sale a lease is based on the substance of the arrangement at been transferred and the SSS either has transferred line basis over the estimated useful lives of each part of an is assessed to determine whether there is any indication of inception date of whether the fulfillment of the arrangement substantially all risks and rewards of ownership or has item of property and equipment. impairment or an impairment previously recognized may no is dependent on the use of a specific asset or assets and the neither transferred nor retained substantially all the risks longer exist or may have decreased. If any such indication arrangement conveys a right to use the asset. and rewards of ownership, but has transferred control of The estimated useful lives of property and equipment are as exists, then the asset’s recoverable amount is estimated. the asset. follows: Recoverable amount is the higher of an asset’s fair value less a. SSS as lessee costs to sell and its value in use. 2.4 Cash equivalents Assets Life Leases which do not transfer to the SSS substantially all the Building Impairment loss is recognized if the carrying amount of risks and benefits of ownership of the asset are classified as Cash equivalents comprise short-term, highly liquid /building improvements 10-30 years an asset exceeds its estimated recoverable amount. The operating leases. Operating lease payments are recognized investments that are readily convertible to known amounts of Furniture and equipment carrying amount of the asset is reduced through the use of as expense on a straight-line basis over the lease term. cash with original maturities of 90 days or less and are subject /computer hardware 5-10 years an allowance account and the amount of loss is recognized to an insignificant risk of change in value. Land improvements 10 years in profit or loss unless it relates to a revalued asset where the b. SSS as lessor Transportation equipment 7 years value changes are recognized in other comprehensive income/ 2.5 Supplies and materials Leasehold improvements 10-30 years (or the term loss and presented within reserves in the property valuation Leases where the SSS does not transfer to the lessee of lease whichever reserve portion. Depreciation and amortization charge for substantially all the risk and benefits of ownership of the Supplies and materials are valued at cost using the weighted is shorter) future periods is adjusted. asset are classified as operating leases. Lease income from average method. operating leases is recognized as income on a straight-line Building and building improvements have residual value basis over the lease term. 2.6 Investment property equivalent to 10% of the acquisition/appraised value while other items of property and equipment except land have one Investment property account consists of property held to earn peso as their residual value. rentals and/or for capital appreciation. 34 2010 AN N UAL REPORT 35
  • 20. fiNANCiAL sTATEMENTs 2010 3. CASH AND CASH EQUIVALENTS 8. NON-CURRENT FINANCIAL ASSETS 9. INVESTMENT PROPERTY 2010 2009 2010 2009 Land Building development cost Total Cash on hand and in banks 1,599,637,243 3,313,776,021 Available-for-sale Fair value, 01 January 2010 8,109,319,990 2,776,758,858 9,596,673 10,895,675,521 Time and special financial assets 77,414,883,712 69,294,782,362 Additions - 38,588,498 89,165 38,677,663 savings deposits 5,779,018,770 5,681,626,470 Held-to-maturity investments Cancellation of contract - 6,155,510 - 6,155,510 7,378,656,013 8,995,402,491 Notes and bonds 105,676,840,914 82,289,672,152 Disposals (140,000,000) (44,076,780) - (184,076,780) Accumulated impairment loss (809,701,706) (884,701,706) Fair value gain 927,585,210 445,109,610 - 1,372,694,820 Cash in banks earn interest at the respective bank deposit rates. Time 104,867,139,208 81,404,970,446 Fair value, 31 December 2010 8,896,905,200 3,222,535,696 9,685,838 12,129,126,734 and special savings deposits are made for varying periods of up to 90 Loans and receivables Fair value, 31 December 2009 8,109,319,990 2,776,758,858 9,596,673 10,895,675,521 days depending on the immediate cash requirements of SSS and earn Member loans 43,292,288,927 44,407,118,536 interest at the prevailing time and special savings deposit rates. Loan to National The costs of investment property as at 31 December 2010 and 2009 stood at P7.58 billion and P7.73 billion, respectively. Home Mortgage In consideration of the banks’ making their deposit pick up facility Finance Corporation 14,003,355,778 14,990,587,912 The fair value of investment property is determined based on valuations performed by independent appraisers. available to the SSS, the latter agreed to maintain an average daily Sales contract receivable 5,262,750,215 5,224,529,406 balance of P1 million in a non-drawing interest bearing current Housing loans 4,620,116,641 4,661,268,782 The following amounts are recognized in the statement of comprehensive income: account/savings account (CASA) with each of the banks’ servicing Loan to Home Development branches. As of 31 December 2010, P94 million is being maintained Mutual Fund 2,739,484,368 3,316,217,919 2010 2009 in several banks for such purpose. Commercial and Gain on fair value adjustment 1,372,694,820 186,376,519 industrial loans 681,392,501 888,778,261 Rental income 458,511,931 394,624,497 4. HELD-TO-MATURITY INVESTMENTS Loan to other government Gain on sale/disposal 63,132,286 5,438,485 agencies 110,086,039 122,198,032 Penalty on rentals 2,170,411 1,556,391 2010 2009 Program MADE 17,219,220 17,219,220 Direct operating expenses (70,943,396) (89,686,173) Short-term money placements 6,174,075,669 11,270,800,000 70,726,693,689 73,627,918,068 1,825,566,052 498,309,719 Treasury bills 1,223,531,421 2,022,828,605 Accumulated impairment loss (2,600,613,796) (855,367,110) 7,397,607,090 13,293,628,605 68,126,079,893 72,772,550,958 250,408,102,813 223,472,303,766 Short-term money placements are short-term investments with 10. PROPERTY AND EQUIPMENT original maturities of more than 90 days. The carrying amount of available-for-sale financial assets is as follows: furniture and equipment, 5. HELD-FOR-TRADING FINANCIAL ASSETS 2010 2009 transportation Marketable securities equipment, The cost of held-for-trading financial assets as at 31 December 2010 Cost 49,523,683,085 42,462,256,771 Land, Buildings and computer and 2009 are P1,872.51 million and P1,037.17 million, respectively. Unrealized gain 27,406,102,250 26,347,427,214 land/building/leasehold hardware and Construction 76,929,785,335 68,809,683,985 improvements others in progress Total Ordinary and preference shares 6. RECEIVABLES Cost 1,208,710,857 1,208,710,857 Accumulated impairment loss (723,612,480) (723,612,480) Gross carrying amount 2010 2009 485,098,377 485,098,377 01 January 2010 3,313,599,142 3,735,413,828 22,840,059 7,071,853,029 Collecting banks/agents/ 77,414,883,712 69,294,782,362 Additions - 140,109,224 26,997,205 167,106,429 bayad center 3,483,825,943 2,435,277,439 Transfers 3,668,690 - (3,499,916) 168,774 Interest receivable 2,564,234,272 2,218,145,921 The current portion of held-to-maturity government notes and bonds Retirement/disposals/cancellation (197,251) (347,254,759) - (347,452,010) Other receivables 951,306,392 681,458,938 as at 31 December 2010 and 2009 are P3.61 billion and P8.20 billion, 31 December 2010 3,317,070,581 3,528,268,293 46,337,348 6,891,676,222 6,999,366,607 5,334,882,298 respectively. Accumulated depreciation/amortization 01 January 2010 618,739,978 2,982,704,014 - 3,601,443,992 Using the BSP guidelines in identifying and monitoring problem Charge for the period 50,086,759 206,145,469 - 256,232,228 loans and risk assets and setting up of allowance for probable losses, Retirement/disposals/cancellation - (341,473,708) - (341,473,708) 7. OTHER CURRENT ASSETS impairment provision amounting to P1.75 billion was recognized in 31 December 2010 668,826,737 2,847,375,775 - 3,516,202,512 2010 for 5 years and above delinquent member loan accounts. Accumulated impairment loss 2010 2009 01 January 2010 56,723,750 - 56,723,750 Supplies and materials inventory 77,551,114 107,185,948 31 December 2010 56,723,750 - 56,723,750 Prepaid expenses 5,975,871 5,563,231 Net book value, 31 December 2010 2,591,520,094 680,892,518 46,337,348 3,318,749,960 Advances-officials and employees 4,396,305 3,937,188 Net book value, 31 December 2009 2,638,135,414 752,709,814 22,840,059 3,413,685,287 Revolving fund 1,022,174 1,076,467 88,945,464 117,762,834 Land, buildings and building improvements were last revalued in December 2009 by independent valuers. Valuations were made on the basis of market value.36 2010 AN N UAL REPORT 37
  • 21. fiNANCiAL sTATEMENTs 2010 If land, buildings and building improvements were stated on the historical cost basis, the carrying amount would be as follows: 13. OTHER NON-CURRENT ASSETS The Flexi-fund represents equities of members under the voluntary supplementary benefits program of the SSS for Overseas Filipino 2010 2009 2010 2009 Workers and authorized under Section 4.a.2 of the RA 8282. The Social Cost 1,694,194,129 1,694,222,606 Interest receivable 12,708,798,008 12,744,155,258 Security Commission (SSC), in its Resolution No. 288 dated 18 April Accumulated depreciation (548,450,914) (508,769,669) Accumulated impairment loss (12,707,637,955) (12,740,230,932) 2001, approved the establishment of this supplementary benefits 1,145,743,215 1,185,452,937 1,160,053 3,924,326 program. Advances-fire/MRI/ Lease rentals amounting to P12.63 million and P13.09 million for the year ended 31 December 2010 and 2009, respectively were included in the foreclosure proceedings 165,588,834 179,145,923 The Legal Education Fund (LEF) is a special endowment fund under statement of comprehensive income. Accumulated impairment loss (953,811) (953,811) the control of the Legal Education Board (LEB), which was created 164,635,023 178,192,112 under RA 7662. It is being administered by the SSS, which invests the Others 909,879,048 871,800,363 same with due and prudent regard to its solvency, safety and liquidity. 11. INTANGIBLE ASSETS Accumulated impairment loss (516,149,501) (516,149,501) 393,729,547 355,650,862 On 8 March 2010, the SSS returned the P10 million fund to the Licenses software Total 559,524,623 537,767,300 Commission on Higher Education (CHEd) through its Chairman Cost Emmanuel Y. Angeles. The return of the fund was agreed upon during 01 January 2010 291,020,968 138,757,006 429,777,974 Non-current interest receivable includes those originated from Home the 3 February 2010 meeting of the SSS Investments Group with Additions 4,239,649 81,672,847 85,912,496 Guaranty Corporation (HGC) guaranteed corporate notes and loan to some members of the LEB led by its Chairman and the representatives Retirement/disposals/cancellation (80,596,996) - (80,596,996) National Home Mortgage Finance Corporation (NHMFC) amounting of CHEd. In the said meeting, they agreed that the SSS has no legal 31 December 2010 214,663,621 220,429,853 435,093,474 to P120.44 million and P12.58 billion, respectively. authority to hold the fund since it represents the remaining funds in Accumulated amortization the books of CHEd for purposes of LEB’s operational requirements and 01 January 2010 29,303,384 39,398,930 68,702,314 The Department of Finance is still evaluating HGC’s request to does not form part of the LEF. Amortization charge for the period 22,988,142 13,572,715 36,560,857 issue bonds to settle its guaranty obligations with the SSS. HGC 31 December 2010 52,291,526 52,971,645 105,263,171 also offered, subject to SSS evaluation, to settle all outstanding The Unified Multi-purpose ID (UMID) fund represents amount Accumulated impairment loss guaranteed obligations through assignment and conveyance of its provided by the National Statistics Office (NSO), which will be used 01 January 2010 151,195,023 44,946,400 196,141,423 acquired assets in various locations. to pay all direct and indirect costs of the central verification and Retirement/disposals/cancellation (74,893,896) - (74,893,896) enrollment system for the UMID as well as all costs necessary and 31 December 2010 76,301,127 44,946,400 121,247,527 The non-current interest receivable from loan to NHMFC represents incidental thereto, including all expenses to be incurred related to the Net book value, 31 December 2010 86,070,968 122,511,808 208,582,776 portion of the total restructured loan amount that SSS and NHMFC formulation, drafting recommendation and approval of the project Net book value, 31 December 2009 110,522,561 54,411,676 164,934,237 have allocated to unpaid interest and penalty as of cut-off date, 31 implementation and information campaign plans. March 2002, payment of which shall be sourced from the residuals of The carrying amount of intangible assets with indefinite lives as at 31 December 2010 amounted to P36.66 million. the cash flows of the remaining accounts upon full payment of low, moderate and high delinquency outstanding obligations. 16. DEFERRED INCOME 12. NON-CURRENT ASSETS HELD FOR SALE This account represents advance rental payments from tenants of SSS 14. ACCOUNTS PAYABLE AND ACCRUED EXPENSES property. Acquired assets/ Land Building registered Total 2010 2009 Carrying amount, 01 January 2010 4,911,924,579 162,287,607 353,478,285 5,427,690,471 Accounts payable 2,135,812,426 1,986,268,116 17. OTHER CURRENT LIABILITIES Accumulated impairment loss (5,356,794) (15,173,429) (2,391,588) (22,921,811) Accrued expenses 1,102,569,442 1,261,835,646 Net carrying amount, 01 January 2010 4,906,567,785 147,114,178 351,086,697 5,404,768,660 3,238,381,868 3,248,103,762 This account includes among others collections credited to the Additional/adjustments 381,513,420 - 53,384,496 434,897,916 accounts pending receipt of collecting agencies’ documents and Disposals (9,159,558) (3,384,986) (55,115,840) (67,660,384) actual distribution of collections and payments whose nature are not Impairment (loss)/recovery 174,482 (271,889) (97,407) 15. FUNDS HELD IN TRUST indicated by payors. Carrying amount, 31 December 2010 5,279,096,129 143,729,192 349,083,464 5,771,908,785 Carrying amount, 31 December 2009 4,906,567,785 147,114,178 351,086,697 5,404,768,660 This account includes among others bidders’ deposits, withholding Breakdown as follows: taxes and retention withheld from suppliers and creditors to answer for defective deliveries or services, contributions to GSIS, PHIC, HDMF 2010 2009 and SSS Provident Fund and equity of Flexi-fund members. Member loan (ML) collection 1,380,694,777 898,748,166 Real estate loan collection 534,281,784 270,324,207 Breakdown as follows: Undistributed collection 428,831,056 377,824,043 ML collection deducted from 2010 2009 benefits payments 330,410,838 41,705,930 Flexi-fund 269,057,470 228,026,818 OFW collections 265,672,623 273,012,229 Officials and employees 130,020,909 131,980,533 Sales contract receivable 61,091,057 81,741,630 Borrowers and other payors 120,522,057 113,877,011 Rental receivable 855,145 2,809,290 Unified multi-purpose ID fund 99,392,076 - Employees’ housing loan program 117,227 31,163 Due to other government units 94,043,739 86,757,756 Express padala 96,654 841,504 Supplies and creditors 48,020,831 35,643,494 3,002,051,161 1,947,038,162 Dividend - stock investment loan program 15,501,904 15,501,904 Educational loan fund - DECS 1,576,846 1,497,104 Legal education fund - 10,005,556 778,135,832 623,290,17638 2010 AN N UAL REPORT 39
  • 22. fiNANCiAL sTATEMENTs 2010 18. ACCRUED RETIREMENT BENEFITS In its Resolution No. 402 s. 2007, the SSC, adopted the use of 21. INVESTMENT AND OTHER INCOME 22. BENEFIT PAYMENTS acquisition cost of shares of stock as the basis for computing the 18.1 Retirement benefits 30% limit in equity investments, based on the opinion dated 25 2010 2009 This account represents payments to members and their beneficiaries June 2007 of the Legal and Adjudication Sector of COA. Investment income in the event of disability, sickness, maternity, old age, death and other Retirement benefits are available to qualified employees under Income from current contingencies resulting in loss of income or financial burden. any one of RA 1616, RA 660 and RA 8291. 20.2 Actuarial valuation of the reserve fund of the SSS investments Held-to-maturity investments 18.2 Terminal leave benefits The Social Security Act of 1997 requires the Actuary of the System Interest income 452,568,941 1,897,400,081 to submit a valuation report every four (4) years, or more frequently Held-for-trading financial assets 23. PERSONAL SERVICES This represents the cash value of the accumulated vacation and as may be necessary, to determine the actuarial soundness of the Dividend income 25,923,712 19,836,699 sick leave credits of employees, 50% of which can be monetized reserve fund of the SSS and to recommend measures on how to Gain on fair value adjustment 1,515,595,442 356,796,375 2010 2009 once a year and the balance payable upon resignation/ improve its viability. Gain on sale/disposal 459,704,837 899,084,322 Salaries and wages 2,207,761,858 2,042,390,245 retirement. Investments expense (24,191,069) (57,424,537) Madatory contributions 1,178,847,346 985,359,489 The reserve fund is affected by (a) changes in demographic factors 1,977,032,922 1,218,292,859 Incentive award 749,088,274 743,792,358 18.3 Retirement incentive award (such as increased life expectancy, ageing of population, declining 2,429,601,863 3,115,692,940 Bonus and rice grant 506,303,033 465,204,453 fertility level and delay in retirement) and (b) the economic Income from non-current Allowances 352,977,335 226,048,594 Employees with at least 20 years of creditable service are entitled to conditions of the country. Taking into account the uncertainty of investments Other personal services 157,514,093 139,666,890 P2,000 for every year of service upon retirement. future events, economic assumptions on interest rates, inflation Available-for-sale Terminal leave pay 119,173,700 128,261,500 rates and salary wage increases, among others, are projected. financial assets 5,271,665,639 4,730,723,529 The accrued retirement benefits of employees at 31 December 2010 Dividend income 3,414,379,491 2,916,145,314 and 2009 are as follows: In the 1999 Actuarial Valuation, the Social Security Fund (SSF) Gain on sale/disposal 10,066,595,622 6,231,014,237 Provident fund (part of mandatory contributions) is a defined was projected to last until 2015. Since then, parametric measures Investment expense (1,473,850) - contribution plan made by both the SSS and its officers and 2010 2009 (e.g. increases in the contribution rate from 8.4% to 9.4% in March Impairment loss - (24,217,590) employees. The affairs and business of the fund are directed, Retirement benefits/gratuity 673,544,852 677,779,595 2003 and to 10.4% in January 2007, increase in the maximum 13,479,501,263 9,122,941,961 managed and administered by a Board of Trustees. Upon retirement, Terminal leave pay 621,563,865 593,323,045 salary base for contributions from P12,000 to P15,000, and the Held-to-maturity investments death or resignation, the employee or his heirs will receive from the Retirement incentive award 89,659,624 88,072,249 redefinition of Credited Years of Service (CYS) and operational Interest income 7,634,139,077 5,553,592,672 fund payments equivalent to his contributions, his proportionate 1,384,768,341 1,359,174,889 developments (e.g. Tellering System, more accounts officers, Penalty on overdue amortization 608 3,646 share of the SSS’ contributions and investment earnings thereon. cost saving measures, improved investment portfolio and Gain on sale/disposal - 166 However, effective 28 January 2005, retired and separated members management, etc.) were implemented to strengthen the SSF. Investment expense (604,162) (566,323) have the option to retain part or all of his total equity in the fund for 19. RENT PAYABLE 7,633,535,523 5,553,030,161 a maximum period of five years. The System’s concerted efforts have resulted in improved actuarial Loans and receivable This account represents future rent payments for lease contracts soundness. Results of the 2003 Actuarial Valuation indicate an Interest income 2,908,825,689 2,871,301,566 entered by the SSS for its various branches. extension on the life of the fund by sixteen years, from 2015 Penalty on overdue 24. MAINTENANCE AND OTHER OPERATING EXPENSES to 2031. amortization 807,264,456 713,694,415 Investment expense (303,060) (602,887) 2010 2009 20. RESERVES The increase in contribution rate to 10.4%, effective January 2007, Impairment loss (1,746,332,726) (4,081,582) Other operating expenses 338,871,378 415,053,615 has extended further the SSF life to 2036, taking already into 1,969,454,359 3,580,311,512 Depreciation 20.1 Investment reserve fund (IRF) account the grant of 10% across-the-board increases in pension Investment property 1,825,566,052 498,309,719 /amortization expense 292,793,085 223,998,558 effective September 2006 and September 2007. 27,337,659,060 21,870,286,293 Maintenance and repairs - All revenues of the SSS that are not needed to meet the current Other income building/leased offices 280,436,866 275,404,010 administrative and operational expenses are accumulated in the The following table presents the results of the 2007 Actuarial Interest income from Light and water 178,527,241 143,671,599 reserve fund. Such portion of the reserve fund as are not needed Valuation, compared to the previous 2003 Valuation results. There cash in bank and Maintenance and repairs - to meet the current benefit obligations is known as the IRF which are two columns under the 2003 Valuation: (1) the original results cash equivalents 389,047,630 448,511,170 furniture and equipment 164,366,293 227,988,659 the SSC manages and invests with the skill, care, prudence and as published in the 2003 Actuarial Valuation Report; and (2) the Director’s fee 23,359,055 11,885,142 Service bureau expenses 138,001,528 378,396,095 diligence necessary under the circumstances then prevailing that a updated results that take into consideration the across-the-board Non-current assets held for sale Office space rentals 128,000,180 124,087,159 prudent man acting in like capacity and familiar with such matters pension increases in 2006 and 2007 and the contribution rate Rental income 35,089,798 12,241,523 Communication expenses 127,171,098 135,151,280 would exercise in the conduct of an enterprise of a like character increase at the start of 2007. Gain on sale/disposal 86,756,509 117,796,135 Supplies and materials 106,884,216 121,470,027 and with similar aims, subject to prescribed ceilings under Section Related expense (5,668,009) (3,858,714) COA audit services 37,843,695 36,753,557 26 of the SS Law (the Act). Actuarial Valuation Impairment loss (1,479,330) (17,150,920) Maintenance and repairs - Comparison of Key Projection Results Reversal of impairment transportation equipment 24,935,126 22,845,061 No portion of the IRF or income thereof shall accrue to the general 2007 Valuation versus 2003 Valuation loss/revaluation decrease 108,710,662 377,533,793 Special Project 24,914,484 42,906,809 fund of the National Government or to any of its agencies or Under the Baseline scenario Service fee - salary loan 111,066,521 134,739,300 Impairment loss - instrumentalities, including government-owned or controlled Others-net (236,647,210) 33,635,080 operating assets - 196,141,423 corporations, except as may be allowed under the SS Law Act. Key Projection Results 2003 Valuation 2007 Valuation 510,235,626 1,115,332,509 1,842,745,190 2,343,867,852 The Act also provides that no portion of the IRF shall be invested Original * Updated ** Total investment and for any purpose or in any instrument, institution or industry over No Across-the- Year Fund Will Last 2031 2036 2039 other income 27,847,894,686 22,985,618,802 and above the prescribed cumulative ceilings as follows: 40% Board Increase Year Net Revenue 2022 2026 2030 in private securities, 35% in housing, 30% in real estate related in Pensions Becomes Negative investments, 10% in short and medium-term member loans, 30% in government financial institutions and corporations, 30% in * As published in the 2003 Actuarial Valuation Report infrastructure projects, 15% in any particular industry and 7.5% in ** Updated results after the increase in contribution rate to 10.4% in foreign-currency denominated investments. January 2007 and the 0% across-the-board pension increases in 1 2006 and 200740 2010 AN N UAL REPORT 41
  • 23. fiNANCiAL sTATEMENTs 2010 25. OPERATING LEASE COMMITMENTS The SSS implements structured and standardized evaluation The following table shows the latest aging analysis of some financial assets: guidelines, credit ratings and approval processes. Investments 25.1 SSS as lessee undergo technical evaluation to determine their viability/acceptability. 2010 Due diligence process (i.e. credit analysis, evaluation of the financial Past due but not impaired (Age in months) performance of the issuer/borrower to determine financial capability The SSS leases offices for its various branches under cancellable to pay obligations when due, etc.) and information from third party Neither operating lease agreements. The leases have varying terms, (e.g. CIBI Information, Inc., banks and other institutions) are used to past due escalation clauses and renewal rights. determine if counterparties are credit-worthy. nor impaired 3-12 13-36 37-48 49-60 Over 60 Expired impaired Total 25.2 SSS as lessor With respect to stockbrokers, the SSS has adopted the following (In Millions) mitigating measures: Held-for-trading financial assets 3,331 - - - - - - - 3,331 The SSS leases out portion of its office space to various tenants a. Minimum requirements for stockbroker evaluation under cancellable operating lease agreements. The leases have Available-for-sale financial assets 77,415 - - - - - - 723 78,138 varying terms, escalation clauses and renewal rights. a.1 Stockbroker is a Member of Good Standing of the Exchange as defined under Rule 3(g) of the Securities Regulation Code. Held-to-maturity investments Short-term money placements 6,174 - - - - - - - 6,174 26. FINANCIAL RISK MANAGEMENT a.2 The stockbroker shall have a minimum capitalization of fifteen Treasury bills 1,224 - - - - - - - 1,224 million pesos. Corporate notes and bonds 12,349 - - - - - - 810 13,159 The SSC and SSS management are active in the evaluation, scrutiny and Government notes and bonds 92,518 - - - - - - - 92,518 credit approval process on all investments being undertaken by the SSS. a.3 The stockbroker shall be profitable for three of the last five The SSC has adopted adequate policies on investment procedures, risk years of operation. However, stockbrokers not able to meet the profitability requirement may be qualified provided that Loans and receivable assessment and measurement and risk monitoring by strict observance on the statutory limit provided under the RA 8282 and compliance capitalization is at least thirty million pesos for those with National Home Mortgage Finance Corporation 13,867 - - - - 136 14,003 to the investment procedures. Internal controls are also in place and losses. Home Development Mutual Fund 2,739 - - - - 2,739 comprehensive audit is being done by Internal Audit Services. Commercial and industrial loans 602 - - - 2 8 4 65 681 a.4 The stockbroker shall have a positive track record of service to Program MADE 17 17 The main risk arising from the SSS’ financial instruments are interest other institutional clients. Other government agencies 110 - - - - - - - 110 rate risk, credit risk, liquidity risk and market price risk. The SSC and SSS Sales contract receivable management review and agree on the policies for managing these risks as b. Stockbroker transactions, allocations and limits Investment property 87 4 1 - - - - - 92 summarized below. b.1 Total daily transactions, excluding block transactions, per Non-current assets held for sale 285 140 117 30 17 35 11 - 635 26.1 Interest rate risk stockbroker shall not exceed 50% of stockbroker capitalization/ Available-for-sale financial assets 4,535 - - - - - - - 4,535 stockholder’s equity, whichever is lower. Employee housing loan program 421 4 1 - - 2 - 2 430 Cash flow interest rate risk is the risk that the future cash flows of 215,657 148 119 30 19 45 15 1,753 217,786 a financial instrument will fluctuate because of changes in market b.2 Total transactions, excluding negotiated block transactions, for interest rates. Fair value interest rate risk is the risk that the value of each of the accredited stockbrokers, during the accreditation a financial instrument will fluctuate because of changes in market period, shall not exceed 15% of total SSS transactions. 2009 Restated interest rates. b.3 Transactions, excluding negotiated block transactions, with the Past due but not impaired (Age in months) The SSS strictly adheres to the provisions of Section 26 of the SSS by the stockbroker, within the year of accreditation, shall Neither RA 8282 which states that the funds invested in various corporate not exceed 40% of its total market transactions. This ensures past due notes/bonds, loan exposures and other financial instruments shall that the stockbroker does not rely heavily on SSS for its business. nor earn an annual income not less than the average rates of treasury impaired 3-12 13-36 37-48 49-60 Over 60 Expired impaired Total bills or any acceptable market yield indicator. Currently, the SSS has To avoid significant concentrations of exposures to specific industries or group of issuers and borrowers, SSS investments are regularly (In Millions) achieved a mix of financial investments with interest rates that are within acceptable level. Significant investments in said instruments monitored so that in no time shall they exceed the prescribed Held-for-trading financial assets 980 - - - - - - - 980 have fixed interest rates while repricing rates of investments in cumulative ceilings specified in Section 26 of the RA 8282. corporate notes/bonds that carry floating interest rates are always Available-for-sale financial assets 69,295 - - - - - - 723 70,018 based on acceptable yield (i.e. prevailing 3 months Philippine Dealing System Transaction-Fixing Rate plus a spread of not less than 0.50%). Held-to-maturity investments Short-term money placements 11,271 - - - - - - - 11,271 26.2 Credit risk Treasury bills 2,023 - - - - - - - 2,023 Credit risk is the risk of suffering financial loss should any of the SSS’ Corporate notes and bonds 12,665 - - - - - - 885 13,550 counterparties fail to fulfill its contractual obligations to the SSS. Government notes and bonds 68,740 - - - - - - - 68,740 This includes risk of non-payment by issuers and borrowers, failed settlement of transactions and default on outstanding contracts. Loans and receivable National Home Mortgage Finance Corporation 14,855 - - - - - - 136 14,991 Home Development Mutual Fund 3,316 - - - - - - - 3,316 Commercial and industrial loans 808 1 - 2 4 9 - 65 889 Program MADE - - - - - - - 17 17 Other government agencies 122 - - - - - - - 122 Sales contract receivable Investment property 84 4 1 - - - - - 89 Non-current assets held for sale 292 162 90 17 13 17 9 - 600 Available-for-sale financial assets 4,535 - - - - - - - 4,535 Employee housing loan program 345 1 - - - - - 7 353 189,331 168 91 19 17 26 9 1,833 191,49442 2010 AN N UAL REPORT 43
  • 24. Internal 26.3 Liquidity risk covers/involves the (a) production, supply and delivery of SSS UMID Auditor’s Report contactless smartcards and plastic card jackets (b) supply, delivery, Liquidity risk arises from the possibility that the SSS may encounter installation, customization, operation and maintenance of a card management system (CMS) and a key management system (KMS) difficulties in raising funds to meet its payment obligations (i.e. (c) supply, delivery and maintenance of two hundred ninety (290) payment of benefits, working capital requirements and planned contactless smartcard readers/writers (d) set-up of training facility capital expenditures) when they fall due. The SSS manages this risk and the conduct of personnel training and (e) all other items that Internal Audit Service considers total member satisfaction as the most important gauge of the performance of SSS instead of through daily monitoring of cash flows in consideration of future can be reasonably inferred as being required for the completion of figures that signify improved collections and maximum investment yields. Determining client satisfaction, however, is not an easy payment due dates and daily collection amounts. The SSS also CMS and KMS. Set-up and delivery of various deliverables shall be maintains sufficient portfolio of highly marketable assets that can made within 90 days from signing of the agreement. task as members have different standards in terms of service delivery. In this vein, we choose carefully each audit project by having easily be liquidated as protection against unforeseen interruption in mind the welfare of members and making sure that what we do redounds ultimately to their benefit. As of September 2010, 290 units contactless card readers were to cash flow. delivered and paid for in the amount of P2.32 million. However, the local card production facility that should have been set-up is still Based on the completed and submitted audit reports for 2010, hereunder are the most significant observations: 26.4 Market price risk not compliant with the following requirements: (1) submission of permit to operate generator set and other mechanical equipment The SSS’ market price risk arises from its investments carried at and (2) dedicated 24/7 data communication line between the 1) Opening tellering SSS in branches is a clear strategy designed to afford members the convenience to pay their contributions fair value (fair value through profit or loss and available-for-sale facility and SSS CMS. financial assets). It manages this risk by monitoring the changes in and loan amortizations. However, vital requirements should not be compromised for the sake of convenience. The security and c. Data capture safety of the funds and personnel are paramount considerations in the decision to open a tellering branch. Hence, it requires a the market price of the investments. The SSS signed a Memorandum of Agreement (MOA) with standard layout with all the necessary facilities to prevent incidents resulting in the loss of funds. Clear policy guidelines and Philippine Postal Corporation (PhilPost) on 12 May 2010 for the 27. OTHER MATTERS comprehensive operating procedures are also a prerequisite. outsourcing of the data capture and enrollment component of the UMID project with an estimated cost of P1.26 billion 27.1 Commitments through Negotiated Procurement. Under the agreement, PhilPost shall provide SSS with a biometric data services facility that will 2) The examination of the records of the National Home Mortgage and Finance Corporation (NHMFC) not only conforms with the Amount authorized but not yet disbursed for capital expenditures capture biometric or demographic data to be used by the SSS in provisions of the Restructuring Agreement between SSS and NHMFC, but also runs parallel to the legal mandate of ensuring the issuance of UMID-compliant ID cards to its members. This as of 31 December 2010 is approximately P734.53 million. shall include SSS members and applicants whose biometric data prudent management of SSS investments. The SSS Lock box account was opened exclusively for the deposit of collections from the have not yet been previously captured and/or whose data need Unified Home Lending Program and for the payment of management fees and necessary expenses. Audit covered transactions 27.2 Unified Multi-purpose ID (UMID) to be updated. PhilPost shall likewise deploy such data capture workstations, personnel and other resources so as to adequately in 2004 and 2005. The positive outcome of this project is that both management and NHMFC committed to institutionalize a. Central verification system service the enrollment capture/update needs of SSS ID cards mechanism for the periodic reconciliation of records. applicants and holders. The MOA shall be effective for a period of 5 In line with Executive Order No. 700 dated 16 January 2008 which years unless extended in writing by mutual agreement of SSS and mandates the SSS President and CEO to take over the work of PhilPost. 3) The Accounts Monitoring System (AMS) is an automated system design to facilitate management of employers contributions the National Economic Development Authority (NEDA) Director- General to implement the streamlining and harmonization of the As of December 2010, PhilPost has set-up for testing purposes delinquency. However, the technology has yet to be fully utilized by the intended users due to perceived hitches. Audit has proven ID systems of all Government-Owned and Controlled Corporations a data capture workstation in Diliman Branch. This is to ensure that while there are some deficiencies in AMS most of the major functionalities are available and working. IAS is convinced that (GOCCs) towards a unified multi-purpose ID system, the SSS that the output with respect to the fingerprint, signature signed a Memorandum of Understanding (MOU) with National and demographic data are compliant with the requirements, the AMS is an effective tool in monitoring employer delinquency. Statistics Office (NSO) on 9 September 2009. In pursuance to the specifications, terms and conditions provided for in the Terms of objectives of the UMID, the parties shall build jointly, in favor of Reference found in the Agreement. the NSO, a central verification and enrollment system (CVES) for 4) In 2011, IAS will channel its energy back to the basics. Convinced that the new management will not give any stone unturned as the UMID. All direct and indirect costs of CVES shall be charged 27.3 Tax compliance far as improving corporate governance and operating systems are concerned, IAS will perform its role with even more enthusiasm. against the funds provided by the NSO who in turn shall allocate a total amount of P650 million to fund the project. Implementation After all, customer satisfaction is what drives IAS to perform beyond limits and play a crucial role in the attainment of corporate The amount of taxes withheld (net of adjustments) for the year shall commence upon execution of the MOU and shall end upon goals. the complete turnover of the system from the SSS to the NSO. 2010 amounted to as follows: Relative thereto, the SSS signed an Agreement with winning bidder A LAMCO-EUROLINK JOINT VENTURE (LAMCO) on 6 May Income taxes withheld on compensation 583,621,430.68 2010. The agreement covers the supply, delivery and installation of Value added tax 83,664,319.54 the central verification system (CVS) with a total contract price of Expanded withholding tax 60,978,852.88 P279.97 million to be delivered within 90 days from signing of the 728,264,603.10 agreement. An Advice of Complete Installation for SSS CVS Project was provided Income taxes withheld on compensation and expanded by LAMCO last 24 August 2010. This gave SSS thirty (30) calendar withholding tax are remitted on or before the 15th day of the ANTONETTE L. fERNANdEZ days within which to conduct Inspection and Acceptance Testing. following month except those withheld for the month of December As of December 2010, the testing of the project in accordance with which should be remitted on or before the 20th day of January of Assistant Vice President the criteria described in the Agreement as well as the Acceptance the following year. On the other hand, value added taxes withheld Test based on mutually agreed test procedures and parameters are remitted on or before the 10th day of the following month. Of were still on-going. the total taxes withheld by SSS, P670,620,317.97 was remitted to b. Card production the Bureau of Internal Revenue (BIR) in 2010, while the balance of P57,644,285.13 was remitted in 2011. After an open and competitive bidding, the SSS signed an Agreement with the Joint Venture composed of the ALLCARD PLASTICS PHILIPPINES, INC., the STRADCOM CORPORATION and the TECO ELECTRIC AND MACHINERY CO., LTD on 14 December 2009. The agreement with a total contract price of P1.69 billion44 2010 AN N UAL REPORT 45
  • 25. Historical Data sss gROWTh Of AssETs, REsERVEs & iNVEsTMENTs (Amounts in Million Pesos) AssETs REsERVEs iNVEsTMENTs Year AMT % iNC / (dEC) AMT % iNC / (dEC) AMT % iNC / (dEC) sss COVERAgE ANd PERsONNEL fORCE 1959 68.2 67.6 66.2 1969 963.2 1,312.3 953.7 1,310.8 919.7 1,289.3 1979 6,750.7 600.9 6,641.6 596.4 6,608.6 618.6 fOR ThE YEAR* As Of dECEMBER 31 As Of dECEMBER 31 1989 42,974.2 536.6 42,466.9 539.4 41,781.2 532.2 YEAR W E W E P** W/P E/P 1999 159,688.2 271.6 148,633.8 250.0 151,801.8 263.3 1959 24,719 1,211 401,769 10,956 632 636 17 2000 163,325.7 2.3 152,002.7 2.3 149,226.1 (1.7) 1969 243,857 5,063 2,329,315 88,064 1,996 1,167 44 2001 144,823.8 (11.3) 141,957.2 (6.6) 134,521.0 (9.9) 1979 612,712 11,909 7,381,193 221,000 2,328 3,171 95 2002 143,098.5 (1.2) 139,660.0 (1.6) 130,967.2 (2.6) 1989 704,665 30,358 11,775,459 327,354 3,456 3,407 95 2003 150,618.9 5.3 147,730.9 5.8 138,909.2 6.1 1999 1,152,049 25,894 21,325,966 573,314 4,041 5,277 142 2004 158,007.4 4.9 155,159.4 5.0 143,304.7 3.2 2000 1,304,866 26,868 22,630,832 600,182 3,996 5,663 150 2005 177,719.6 12.5 174,144.2 12.2 166,535.0 16.2 2001 901,834 33,124 23,532,666 633,306 3,942 5,970 161 2006 205,878.6 15.8 202,316.0 16.2 187,759.5 12.7 2002 775,367 34,733 24,308,033 668,039 3,896 6,239 171 2007 224,928.6 9.3 220,097.1 8.8 211,167.9 12.5 2003 743,201 34,535 25,051,234 702,574 4,058 6,173 173 2008 209,535.8 (6.8) 201,907.9 (8.3) 192,663.2 (8.8) 2004 615,152 32,236 25,666,386 734,810 4,043 6,348 182 2009 247,891.3 18.3 240,502.0 19.1 228,919.5 18.8 2005 561,250 23,161 26,227,636 757,971 4,169 6,291 182 2010 271,267.5 9.4 262,663.2 9.2 252,630.6 10.4 2006 511,646 23,792 26,739,282 781,763 4,135 6,467 189 2007 501,938 21,572 27,241,220 803,335 4,145 6,572 194 2008 518,348 27,020 27,759,568 830,355 4,182 6,638 199 sss PROgREss Of OPERATiONs (Amounts in Million Pesos) 2009 458,364 20,036 28,217,932 850,391 4,905 5,753 173 2010 548,191 29,367 28,766,123 879,758 5,143 5,593 171 investment and Operating Expenses Year Contributions Other income Benefits & Others Net Revenue * net of termination 1957 - 1959 72.5 4.0 2.8 6.1 67.7 ** regular SSS employees only 1960 - 1969 959.9 232.3 187.9 118.3 886.0 Worker (W), Employer (E), SSS Personnel (P) 1970 - 1979 5,122.3 2,573.0 1,511.8 495.6 5,687.9 1980 - 1989 23,081.0 29,353.0 15,058.7 1,751.6 35,623.7 1990 - 1999 154,417.9 123,034.2 152,474.4 16,091.3 108,886.4 2000 29,885.5 10,217.3 32,735.1 4,014.9 3,351.2 2001 30,912.0 12,390.1 37,813.5 4,211.5 1,277.0 CONsOLidATEd gROWTh Of AssETs, REsERVEs & iNVEsTMENTs 2002 33,702.1 9,901.2 39,566.3 4,340.5 (303.5) (Amounts in Million Pesos) 2003 38,634.7 11,694.6 41,622.9 4,644.8 4,061.6 2004 43,083.6 7,530.1 43,743.3 5,192.0 1,678.4 AssETs REsERVEs iNVEsTMENTs 2005 46,714.9 10,872.9 45,180.8 5,505.9 6,781.4 Year AMT % iNC / (dEC) AMT % iNC/ (dEC) AMT % iNC / (dEC) 2006 51,633.4 10,953.0 51,051.6 6,249.1 5,285.8 1959 68.2 67.6 66.2 2007 60,769.5 17,117.8 59,665.4 6,697.9 11,524.0 1969 963.2 1,313.3 953.7 1,310.3 919.7 1,288.9 2008 67,668.2 27,848.4 66,820.3 6,636.3 22,059.9 1979 7,258.2 653.6 7,142.6 648.9 7,098.2 671.8 2009 71,166.9 21,988.3 70,963.9 6,967.8 15,223.6 1989 48,200.9 564.1 47,693.6 567.7 46,944.2 561.4 2010 77,957.0 27,016.4 76,088.1 7,014.1 21,871.2 1999 176,875.1 267.0 165,820.6 247.7 168,336.8 258.6 2000 181,741.0 2.8 170,408.7 2.8 166,183.1 (1.3) 2001 163,113.6 (10.2) 161,234.3 (5.4) 151,015.0 (9.1) EMPLOYEEs’ COMPENsATiON ANd sTATE iNsURANCE fUNd gROWTh Of AssETs, REsERVEs & iNVEsTMENTs (Amounts in Million Pesos) 2002 162,606.4 (0.3) 159,547.7 (1.0) 149,211.0 (1.2) 2003 170,875.3 5.1 168,137.3 5.4 155,939.7 4.5 2004 179,084.1 4.8 176,386.1 4.9 160,500.4 2.9 AssETs REsERVEs iNVEsTMENTs 2005 199,713.2 11.5 196,287.5 11.3 181,775.4 13.3 Year AMT % iNC / (dEC) AMT % iNC / (dEC) AMT % iNC / (dEC) 2006 228,444.5 14.4 224,995.9 14.6 205,225.5 12.9 1979 507.5 501.0 489.6 2007 247,737.2 8.4 243,016.7 8.0 225,565.3 9.9 1989 5,226.7 929.8 5,226.7 943.2 5,163.0 954.6 2008 233,122.2 (5.9) 225,602.9 (7.2) 211,355.2 (6.3) 1999 17,186.9 228.8 17,186.8 228.8 16,535.0 220.3 2009 272,610.7 16.9 265,329.8 17.6 248,641.4 17.6 2000 18,415.3 7.1 18,406.0 7.1 16,956.9 2.6 2010 297,591.3 9.2 289,095.0 9.0 273,265.6 9.9 2001 19,303.0 4.8 19,277.1 4.7 16,494.0 (2.7) 2002 19,508.0 1.1 19,887.7 3.2 18,243.8 10.6 2003 20,406.4 4.6 20,406.4 2.6 17,030.5 (6.7) 2004 21,226.7 4.0 21,226.7 4.0 17,195.7 1.0 2005 22,143.3 4.3 22,143.3 4.3 15,240.4 (11.4) CONsOLidATEd PROgREss Of OPERATiONs 2006 2007 22,679.9 22,919.6 2.4 1.1 22,679.9 22,919.6 2.4 1.1 17,466.1 14,397.4 14.6 (17.6) (Amounts in Million Pesos) 2008 23,695.1 3.4 23,695.1 3.4 18,692.0 29.8 2009 24,827.9 4.8 24,827.9 4.8 19,721.9 5.5 investment and Operating Expenses 2010 26,431.8 6.5 26,431.8 6.5 20,635.0 4.6 Year Contributions Other income Benefits & Others Net Revenue 1957 - 1959 72.5 4.0 2.8 6.1 67.7 1960 - 1969 959.9 232.3 187.9 118.3 886.0 EMPLOYEEs’ COMPENsATiON ANd sTATE iNsURANCE fUNd PROgREss Of OPERATiONs 1970 - 1979 5,599.3 2,677.9 1,584.0 504.4 6,188.8 (Amounts in Million Pesos) 1980 - 1989 25,114.6 32,879.0 15,791.1 1,852.7 40,349.9 1990 - 1999 158,632.2 139,020.1 158,355.9 17,177.0 122,119.4 investment and Operating Expenses 2000 30,320.5 12,341.1 33,889.2 4,202.1 4,570.4 Year Contributions Other income Benefits & Others Net Revenue 2001 31,371.8 14,238.9 39,015.0 4,447.4 2,148.2 1975 - 1979 477.0 104.9 72.2 8.8 500.9 2002 34,187.7 11,705.0 40,871.6 4,591.5 429.6 1980 - 1989 2,033.6 3,526.0 732.3 100.8 4,726.5 2003 39,420.4 12,763.1 42,806.4 4,776.6 * 4,600.5 1990 - 1999 4,214.3 15,985.9 5,881.6 1,085.7 13,233.0 2004 43,935.8 8,853.3 44,882.5 5,327.3 * 2,579.3 2000 435.0 2,123.9 1,154.1 185.7 1,219.2 2005 47,483.4 12,316.3 46,269.8 5,638.4 * 7,891.4 2001 459.8 1,848.8 1,201.5 235.8 871.2 2006 52,543.6 12,107.9 52,122.0 6,379.9 * 6,149.6 2002 485.6 1,803.8 1,305.3 251.0 733.0 2007 61,829.1 17,870.0 60,746.6 6,819.3 * 12,133.2 2003 785.7 1,068.5 1,183.5 131.8 * 538.9 2008 68,879.3 29,089.0 67,917.4 6,745.6 * 23,305.3 2004 852.2 1,323.2 1,139.2 135.3 * 900.9 2009 72,350.9 22,985.6 72,050.0 7,074.6 * 16,212.0 2005 887.1 1,444.4 1,089.0 132.5 * 1,110.0 2010 79,272.9 27,847.9 77,174.2 7,114.4 * 22,832.2 2006 910.2 1,154.9 1,070.4 130.8 * 863.9 2007 1,059.6 752.2 1,081.2 121.4 * 609.2 * Excludes SS-EC Share in the Corporate Operating Budget of ECC and OSHC 2008 1,211.1 1,240.6 1,097.0 109.3 * 1,245.4 2009 1,183.9 997.3 1,086.0 106.8 * 988.4 2010 1,315.9 831.5 1,086.0 100.3 * 961.0 * Excludes SS-EC Share in the Corporate Operating Budget of ECC and OSHC46 2010 AN N UAL REPORT 47
  • 26. SOCIAL SECURITy COMMISSION From Left to Right: Com. Marianita O. Mendoza, Com. Daniel L. Edralin, Com. Eliza Bettina R. Antonino, President and CEO and Vice Chairman Emilio S. De Quiros, Jr., Chairman Juan B. Santos, Secretary of Labor and Com. Rosalinda Dimapilis-Baldoz, Com. Diana Pardo-Aguilar, Com. Bienvenido E. Laguesma, Com. Ibarra A. Malonzo48 2010 AN N UAL REPORT 49
  • 27. OFFICES UNDER PRESIDENT AND CEO CORPORATE SERVICES SECTOR From Left to Right: (top photo) President and CEO Emilio S. de Quiros, Jr., VP Marissu G. Bugante, Special From Left to Right: (top photo) VP Nicholas C. Balbuena, VP Alfredo S. Villasanta, AVP Hidelza B. Castillo, Assistant to the President and CEO Edmund P. Lee, Department Manager 3 Joselito A. Vivit, AVP Renato N. Malto, AVP Elvira G. Alcantara-Resare, SVP Miguel E. Roca, Jr. Special Assistant to the President and CEO Maria Lourdes N. Mendoza, AVP Santiago Dionisio R. Agdeppa, and SVP Amador M. Monteiro From Left to Right: (bottom photo) VP Gwen Marie Judy D. Samontina, VP Antonio G. Maralit, VP Jesse J. Caberoy, AVP Daisy S. Real, AVP Johnsy L. Mangundayao From Left to Right: (bottom photo) AVP Joel P. Palacios, AVP Antonette L. Fernandez, CEO V Juanita L. Reyes, VP Rizaldy T. Capulong, and VP May Catherine C. Ciriaco50 2010 AN N UAL REPORT 51
  • 28. SSC CHAIRMAN, SSS PRESIDENT & CEO AND SECRETARY TO THE COMMISSION From Left to Right: AVP Renato M. Custodio, Vice Chairman Emilio S. De Quiros, Jr., INVESTMENTS SECTOR Chairman Juan B. Santos, VP Milagros M. Pagayatan From Left to Right: OIC Emmanuel A. Trinidad, AVP Ma. Luz C. Generoso, AVP Mariano Pablo S. Tolentino, EVP Edgar B. Solilapsi, AVP Lilia S. Marquez, VP Rizaldy T. Capulong, VP Gamelin Z. Oczon PRESIDENT & CEO AND PROGRAM MANAGEMENT GROUP BRANCH OPERATIONS SECTOR - NATIONAL CAPITAL REGION OPERATIONS From Left to Right: VP Mario R. Sibucao, AVP Leticia B. Ong, President and CEO Emilio S. de Quiros, Jr., GROUP AND OFFICES UNDER EVP BOS SVP Judy Frances A. See, VP Antonio S. Argabioso, VP Agnes E. San Jose From Left to Right: AVP Alberto C. Alburo, AVP Vicente A. Curimao, AVP Josie G. Magana, EVP and Chief Actuary Horacio T. Templo, AVP Consolacion M. Cancio, VP Naciancino L. Monreal, Special Assistant to the Executive Officer BOS Reynaldo C. Oriel52 2010 AN N UAL REPORT 53
  • 29. SSC & SSS MANAGEMENT DIRECTORy SOCIAL SECURITY COMMISSION ASSISTANT VICE PRESIDENT, DIVISION DEPARTMENT HEAD AND OFFICER-IN- HYDEE R. RAQUID AMELIA A. GUILLERMO HEAD AND EQUIVALENT RANK CHARGE Support Services Audit Department Welcome Branch JUAN B. SANTOS Chairman VILMA P. AGAPITO LEO CALIXTO C. ABAYON GUILLERMO M. URBANO, JR.* LUZVIMINDA J. LIMCAUCO Luzon Central Division Network and Communications Investments Research and Support Binondo Branch EMILIO S. DE QUIROS, JR. Department Department Vice-Chairman SANTIAGO DIONISIO R. AGDEPPA ADELINA A. LIQUE Operations Legal Department ROBERTO B. BAUTISTA CECILIA S. ROA* Malabon Branch DIANA PARDO-AGUILAR International Affairs Department Contributions Accounting Department DANIEL L. EDRALIN ALBERTO C. ALBURO MA. LUZ N. BARROS-MAGSINO ELIZA BETTINA R. ANTONINO NCR Central Division AUREA G. BAY MA. SALOME E. ROMANO Manila YMCA Branch BIENVENIDO E. LAGUESMA Office of the EVP for Branch Operations Information Systems Security MARIANITA O. MENDOZA ELVIRA G. ALCANTARA-RESARE Sector Department PRISCILA F. MARALIT IBARRA A. MALONZO Financial and Budget Division Cainta Branch ROSALINDA D. BALDOZ MARILOU M. BETIC NESTOR R. SACAYAN Members CONSOLACION M. CANCIO Investments Accounting Department Engineering and Maintenance FELIZARDO B. MINOR, JR. NCR South Division Department San Mateo Branch SSS MANAGEMENT FELIPE R. CABAÑERO HIDELZA B. CASTILLO Computer Resource Management JOSE ANTONIO L. SALAZAR FERNANDO O. NICOLAS* PRESIDENT and CEO Application Systems Division Department ID Card Production Department Marikina Branch EMILIO S. DE QUIROS, JR. RENATO M. CUSTODIO REGINALD G. CANDELARIA* CARMEN O. SORIANO NCR SOUTH DIVISION President and Chief Executive Officer Commission Legal Department - I Equities Department Management Support Services Department SONIA C. ABRERA EXECUTIVE VICE PRESIDENT AIDA V. DELOS SANTOS ELEONORA Y. CINCO Makati-Gil Puyat Branch Luzon South Division Quality Management Department SYLVETTE C. SYBICO EDGAR B. SOLILAPSI Foreign Branch Expansion and HELEN L. ABOLENCIA Investments Sector NILO D. DESPUIG ROSA T. CRISOSTOMO Monitoring Department San Juan Branch Bicol Division Planning and Standards Department HORACIO T. TEMPLO MARISSA L. TIZON MARIA RITA S. AGUJA Branch Operations Sector ANTONETTE L. FERNANDEZ GLORIA Y. CUISIA Human Resource Services Department Makati Ayala Branch Internal Audit Services Division Branch Evaluation Department SENIOR VICE PRESIDENT ARNOLD A. TOLENTINO TERESITA L. ARAOS RODRIGO B. FILOTEO CELSO C. CUNANAN Management Information Services Pasay-Roxas Boulevard Branch JOSE B. BAUTISTA Western Mindanao Division Data Center Operations Department Department Luzon Operations Group LETICIA G. BARBERS JOSEFINA O. FORNILOS ELPIDIO S. DE CHAVEZ IKE A. TUBIO Alabang Branch EDDIE A. JARA Northern Mindanao Division Branch Support Services Department Fraud Investigation Department Visayas and Mindanao Operations Group RHODORA G. BONITA BRANCH OPERATIONS SECTOR - LUZON OPERATIONS GROUP AMADOR M. MONTEIRO Chief Legal Counsel MA. LUZ C. GENEROSO Housing Department MARIE ADA ANGELIQUE T. DE SILVA Member Loans Program Management Department JOY A. VILLACORTA Overseas Filipino Workers Program Management Department Pasay-Taft Branch MA. LOURDES T. FLORES From Left to Right: EVP and Chief Actuary Horacio T. Templo, AVP Aida V. Delos Santos, SVP Jose B. Bautista, EDMUND D. LEE Makati JP Rizal Branch MIGUEL E. ROCA, JR. Office of the President and CEO EUGENIA D. DELA CRUZ MARIVIC S. VILLARAMA Cluster Head Vilma P. Agapito, Cluster Head Nilo D. Despuig, AVP Luis V. Olais Information Technology Management Member Relations Department Enterprise Systems Support Department CRISTINE GRACE B. FRANCISCO Group JOSIE G. MAGANA Parañaque Branch NCR North Division NORMITA M. DOCTOR ANITA A. VILLENA JUDY FRANCES A. SEE Sickness, Maternity and Disability Office Services Department FE MARIE F. GERALDO Program Management Group RENATO N. MALTO Program Management Department Taguig Branch Records and Information Management JEAN V. LAGRADA VICE PRESIDENT & EQUIVALENT RANK Department BELINDA B. ELLA Budget Department LIBERTY A. GORDOVEZ* General Accounting Department San Juan Branch ANTONIO S. ARGABIOSO JOHNSY L. MANGUNDAYAO BRANCH HEAD/OFFICER-IN-CHARGE Coverage and Collection Program Operations Accounting Division JOCELYN M. EVANGELISTA MARCIANA A. MARQUEZ Management Division Branch Operations Audit Department NATIONAL CAPITAL REGION (NCR) Mandaluyong Branch LILIA S. MARQUEZ OPERATIONS GROUP NICHOLAS C. BALBUENA Corporate Bonds and Loans Department ROGELIO A. FUNTELAR AMALIA N. TOLENTINO Computer Operations Division Front-End IT Support Department NCR CENTRAL DIVISION Las Piñas Branch LUIS V. OLAIS MARISSU G. BUGANTE Luzon North Division SONIA P. GUINTO* ARTHUR O. ABARY LUZON OPERATIONS GROUP Public Affairs and Special Events Division Corporate Communications Department Novaliches Branch LETICIA B. ONG LUZON NORTH DIVISION JESSE J. CABEROY Medical Program Management ROSALINA C. MANANSALA JOCELYN Q. GARCIA Human Resource Management Division Department Collection Data Processing and San Francisco Del Monte Branch JOSEPHINE C. ABRIL Reconciliation Department La Union Branch RIZALDY T. CAPULONG REYNALDO C. ORIEL JOSEFINA EDITA F. MATA Capital Market Division/Actuarial Office of the EVP for Branch Operation MARY ANN R. MANDAP Commonwealth Branch ESTRELLA R. ARAGON Department and concurrent Deputy Sector Commission Secretariat Department Cauayan Branch Chief Actuary ELIZABETH C. REYES JOEL P. PALACIOS NORA M. MERCADO Diliman Branch PORFIRIO M. BALATICO MAY CATHERINE C. CIRIACO Media Affairs Department Self-Employed and Voluntary Member Tuguegarao Branch Management Services and Planning Program Management Department LORELEI B. SOLIDUM Division EMMANUEL R. PALMA Cubao Branch JANET D. CANILLAS Southern Mindanao Division VAN RENE M. ORPILLA Vigan Branch ANTONIO G. MARALIT Applications Development and NCR NORTH DIVISION Planning and Research Division DAISY S. REAL Maintenance Department - I BENEDICTA B. GARCIA Human Resource Staffing and CYNTHIA O. BARCELON Bangued Branch MARIA LOURDES N. MENDOZA Development Department ALAN GENE O. PADILLA Pasig Shaw Branch Office of the President and CEO Applications Development and BENJAMIN R. LOPEZ JUANITA L. REYES Maintenance Department - III AVELINA M. BAUTISTA Baguio Branch NACIANCINO L. MONREAL Office of the President and CEO Valenzuela Branch NCR Operations Group VENUS D. PASCUAL ROMEO E. REYES HELEN C. SOLITO Branch Accounting Department VIRGINIA F. CALASAHAN Santiago, Isabela Branch GAMELIN Z. OCZON Central Visayas Division Pasig Palatiw Branch Treasury Division FAUSTINO P. PICONES* PAULINA YG. SANTOS* MANOLITO C. TAGALOG Technology Research Department MILAGROS N. CASUGA Solano Branch MILAGROS M. PAGAYATAN Western Visayas Division Kalookan Branch Office of the Commission Secretary VICTORIA A. POQUIZ NANCY M. UMOSO MARIANO PABLO S. TOLENTINO Health Care Department ZARA M. DIZON Laoag Branch GWEN MARIE JUDY D. SAMONTINA Asset Management Department Legarda Branch Technical Support Division DAMIANA A. QUEZON ABELARDO C. YOGYOG EMMANUEL A. TRINIDAD* Applications Development and BERLITA F. FABRERO Bontoc Branch AGNES E. SAN JOSE Cash Department Maintenance Department - II Antipolo Branch Benefits Program Management Division JOSELITO A. VIVIT MARIO R. SIBUCAO Corporate Legal Department Service Delivery Program Management BRANCH OPERATIONS SECTOR – VISAYAS AND MINDANAO OPERATIONS GROUP Department ALFREDO S. VILLASANTA From Left to Right: AVP Emmanuel R. Palma, AVP Helen C. Solito, AVP Rodrigo B. Filoteo, EVP and General Services Division Chief Actuary Horacio T. Templo, SVP Eddie A. Jara, AVP Josefina O. Fornilos, AVP Manolito C. Tagalog *Officer-in-Charge54 2010 AN N UAL REPORT 55
  • 30. LUZON CENTRAL DIVISION TITO A. NAVA FELICITAS A. DEMANDANTE WESTERN MINDANAO DIVISION Carmona Branch Sagay Branch JOSE ALVIN M. ALTRE JAMES B. BUCKLY Urdaneta Branch MARINA PAULINA G. PANTE REYNALDO V. ESPINOSA Pagadian Branch Infanta Branch Roxas Branch SIMPLICIA M. BANIAGO ELIZABETH G. CABATINGAN Malolos Branch ANTONIO V. SORIANO SOCORRO B. FERRER Zamboanga Branch Biñan Branch Kabankalan Branch MARILOU M. SANTOS* Iba Branch WENCESLAO G. VIRTUCIO, JR. JANE T. GARGOLES JAIME S. CASUMPANG San Pablo Branch Victorias Branch Basilan Branch NORMITA M. CRUZ Mariveles-BEPZ Branch BICOL DIVISION VICTOR M. NICOR RUDY M. LACANDALO Bago City Branch Ipil Branch MARITES A. DALOPE NILO D. ALMOSERA Sta. Maria Branch Masbate Branch ESTEBAN L. PANES, JR. GODOFREDO M. MARTINEZ San Jose, Antique Branch Dipolog Branch PABLITA A. DAVID DIVINA T. AVILA Meycauayan Branch Virac Branch EMILIA B. SOLINAP FERDAUSI A. SALASA San Carlos Branch Jolo Branch CORITA M. GADUANG ALBERTO R. BONAFE, JR. Pampanga Branch Sorsogon Branch IRENEO T. VILLAFLOR SSS FOREIGN REPRESENTATIVE OFFICES Dumaguete Branch ELIZABETH R. GARCIA ANTONIO A. CASIMIRO FOREIGN BRANCH EXPANSION Balanga Branch Tabaco Branch NORTHERN MINDANAO DIVISION MONITORING DEPARTMENT & POEA ROLANDO C. MENDOZA BEATRIZ C. GUMABAO EDWIN M. ALO SONIA A. DOMINGO Baler Branch Goa Branch Cagayan de Oro Branch SSS POEA Office MARIA MAXIMA C. MACARAEG CLARIBEL L. REBUENO PERKINS B. CALIXTRO ASIA & PACIFIC Olongapo Branch Naga Branch Camiguin Branch MARIVIC G. RUTOR ALBINA LEAH C. MANAHAN ELENITA S. SAMBLERO BENIGNO J. DAGANI, JR. Brunei Representative Office Baliuag Branch Legaspi Branch Surigao Branch ROBERTO V. ROLDAN LAURA M. MARIANO VIRGILIO A. SANTIAGO ANTONIO G. FABIA Hong Kong Representative Office Angeles Branch Daet Branch Valencia Branch JOSEFINA A. MADURO NARCISO M. MARTINEZ, JR. PRISCO S. SORSONA ANNA PEARL J. FUENTES Singapore Representative Office Alaminos Branch Iriga Branch Ozamis Branch FRENELIE ANN L. ONG MONALISA C. NARDO VISAYAS AND MINDANAO OPERATIONS JOSE ROEL J. HERBIETO Taipei, Taiwan Representative Office Camiling Branch GROUP Oroquieta Branch MIDDLE EAST CEASAR P. SALUDO CENTRAL VISAYAS DIVISION MA. RAINE L. JAMERO Dagupan Branch Butuan Branch WILMA M. ORTIZ GEMMA C. CABERTE Abu Dhabi, UAE Representative Office MARILOU M. SANTOS* Ormoc Branch CHERYL V. JARIOL Iba Branch Iligan Branch ABDAWIYA K. NAVARRO LILIBETH A. CAJUCOM Al-khobar, KSA Representative Office GUILLERMO S. TARUC Tacloban Branch OSWALDO B. MONTENEGRO Tarlac Branch Tandag Branch BENNETTE A. CUETO NICETA M. CARRETAS Doha, Qatar Representative Office LUZON SOUTH DIVISION Cabalogan Branch MARILYN O. TAMAYO Gingoog Branch HARRY A. RACHO JESREL H. ANCHETA ERIC A. CORONADO Jeddah, KSA Representative Office Boac Branch Toledo Branch SOUTHERN MINDANAO DIVISION FRANCISCO U. UY GREGORIO P. ASENDIDO MARIO V. CORRO Kuwait Representative Office Calapan Branch Cebu Branch JOSE S. CATOTO, JR. General Santos City Branch DANILO Q. CALAPE SANTISIMA ROSARIO C. BAAC MAGDALENA H. DINCILLO* Riyadh, KSA Representative Office Puerto Princesa, Palawan Branch Mandaue Branch JOVE L. COLASITO Davao Branch EUROPE CORAZON L. BALAGBIS RODRIGO B. GREGANA Batangas Branch Maasin Branch RIZALITO ALBERTO C. DE LEON ALFREDO JOSE I. RECIO, JR. Toril Branch London, United Kingdom Representative 2010 ANNUAL REPORT COMMITTEE VICTORINA G. CARLOS ALBERTO L. MONTALBO Office Tagaytay Branch Lapu-Lapu Branch SERAFIN G. HINGCO Kidapawan Branch THELMA V. VENTURANZA VIRGINIA S. CRUZ BENJAMIN A. POMBO Milan, Italy Representative Office Chairperson: VP May Catherine C. Ciriaco Bacoor Branch Calbayog Branch EDGAR P. JUANICH Digos Branch FRANCISCO B. BACOL JOSEPHINE S. HIPOLITO MARINO B. TALICTIC Rome, Italy Representative Office Vice Chairperson: VP Marissu g. Bugante Sta. Cruz Branch Tagbilaran Branch SUKARNO D. PENDALIDAY Cotabato City Branch NELSON P. IBARRA WESTERN VISAYAS DIVISION Members: sVP Jose B. Bautista Calamba Branch ROSELANE B. PLAZA VP Antonio s. Argabioso ELVIRA B. BANICO Mati Branch VICTORIA A. LIWANAG Iloilo Branch VP Rizaldy T. Capulong Lucena Branch SUZETTE H. PURIFICACION AVP Ma. Luz C. generoso LILANI B. BENEDIAN Tacurong Branch ROBERTO D. MARCELO Bais Branch AVP Elvira g. Alcantara-Resare San Jose, Occidental Mindoro Branch JULIOUS J. WALES Atty. Joselito A. Vivit RAUL A. CASIANO Bislig Branch Ms. Marissa L. Tizon ROBERTO S. PAGAYUNAN Bacolod Branch Lipa Branch VALERIANO P. WENCESLAO, JR. ISAAC P. CIOCON, JR. Tagum Branch Consultant: Ms. Maria Lourdes N. Mendoza EXEQUIEL O. PANGANIBAN Kalibo, Aklan Branch EPZA Branch REDENTOR S. VIOLA Koronadal Branch Secretariat: Ms. grace B. Burgos Mr. Virgilio M. Macapagal Ms. guia O. Ongchangco Ms. gilby g. Oribello Mr. Zandro Carlos P. sison Mr. ireneo Ma. P. Taala ii *Officer-in-Charge56
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